3. External Consumer Competitor Analysis
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Transcript of 3. External Consumer Competitor Analysis
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Learn | Consult | Research
3.1 External and Consumer Analysis
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Chapter 2 - External andCustomer Analysis
PPT 2-3
Strategic Uncertainties
Strategic Uncertainties Will a major firm enter?
Will a tofu-based dessertproduct be accepted?
Will a technology bereplaced?
Will the dollar strengthenagainst an off-shorecurrency?
Will computer-based
operations be feasible withcurrent technology?
How sensitive is the marketto price?
Strategic Decisions Investment in a product market
Investment in a tofu-based product
Investment in a technology
Commitment to off-shore
manufacturing
Investment in a new system
A strategy of maintaining price
parity
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Cha ter 2 - External and Customer Anal sis PPT 2-4
Strategic Uncertainties
What will thefuture demand?
Performance improvements?
Competitive technologicaldevelopments?
Financial capacity of health careindustry?
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Cha ter 2 - External and Customer Anal sis PPT 2-5
Customer Analysis
Segmentation
Identification of customer groups that respond differently
from other groups to competitive offerings. Thus, a
successful segmentation strategy requires theconceptualization, development, and evaluation of a
targeted competitive offering.
Who are the biggest customers? The most profitable?The most attractive potential customers?
Figure 2.2
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Chapter 2 - External andCustomer Analysis
PPT 2-6
Examples of Approaches to DefiningSegments
Customer Characteristics
Geographic
Type of organization
Size of firm
Lifestyle
Sex
Age
Occupation
Figure 2.3
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Chapter 2 - External andCustomer Analysis
PPT 2-7
Examples of Approaches to DefiningSegments
Product-Related Approaches
User type
Usage
Benefits sought
Price sensitivity
Competitor
Application
Brand loyalty
Figure 2.3
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Cha ter 2 - External and Customer Anal sis PPT 2-8
Segmentation
How should segments be defined?
Benefit Segmentation
Price Sensitivity
Loyalty
Applications Multiple Segments versus Focus Strategy
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Segmentation and Market-DrivenStrategy
SEGMENTS
VALUEOPPORTUNITIES
CAPABILITIES/SEGMENTMATCH
TARGET(S)
POSITIONING
STRATEGY
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Identifying the Health and BeautySupplies Market Segments
Level of
Competition
Generic
Product
Type
Product
Variant
Product
Definition
Health &
Beauty
Aids
Shaving
Equipment
Electric
Razors
Illustrative
Competitors
Consumer
ProductCompanies
Gillette,
Remington, Bic
Braun,
Norelco,
Remington,
Panasonic
Need/Want
Satisfied
Enhancement
of Health & Beauty
Shaving
Electric
Shaving
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Market Segmentation Activities and Decisions
Market to beSegmented
Decide Howto Segment
FormSegments
FinerSegmentation
Strategies
StrategicAnalysisof Segments
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PurchaseBehavior
Characteristicsof People/
Organizations
UseSituation
Buyers Needs/Preferences
Segmentation Variables
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Illustrative Segmentation Variables
Characteristicsof people/organizations
Consumer
Markets
Industrial/
OrganizationalMarkets
Age, gender, income,
family size, lifecycle
stage, geographic
location, lifestyle
Type of industry , size,
geographic location,
corporate culture, stage of
development, producer/
intermediaryUse situation Occasion, importance
of purchase, prior
experience with
product, user status
Application,
Purchasing procedure
(new task, modified
rebuy, straight rebuy
Buyers needs/
preferences
Brand loyalty status, brand
preference,benefits sought,
quality, proneness to make
a deal
Performance requirements,
brand preferences, desiredfeatures, service
requirements
Purchasebehavior
Size of purchase,
frequency of purchase
Volume, frequency
of purchase
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Requirements for Segmentation
SegmentationRequirements
Response
differences
Identifiablesegments
Actionable
segments
Favorablecost/benefit
Stabilityover time
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Approaches to Segment Identification
IDENTIFIERSOF CUSTOMER
GROUPS
CUSTOMERRESPONSEPROFILE
Characteristics
of People andOrganizations
Use Situation
Buyers Needsand Preferences
PurchaseBehavior and
Loyalty
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Segment Dimensions for Hotel LodgingServices
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Illustrative Consumer Perception Map
LowQuality
HighQuality
Expensive
Inexpensive
GROUPI
GROUPV
GROUP
III
GROUPII
GROUPIV
Brand E
Brand D Brand C
Brand B
Brand A
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SELECTING THE SEGMENTATION STRATEGY
Deciding how to segment Strategic analysis of market segments
Customer analysis
Competitor analysis
Positioning analysis
Estimating segment attractiveness
Segmentation fit and implementation
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CustomerAnalysis
PositioningAnalysis
Financial andMarket
Attractiveness
CompetitorAnalysis
Strategic Analysis of Market Segments
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Chapter 2 - External andCustomer Analysis
PPT 2-25
The Brand Loyalty Matrix: Priorities
LowLoyalty
ModerateLoyalty
Loyal
Customer
Non-customer
Medium
Low
toMedium
High
Highest
Zero
High
Figure 3.4
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Customer Analysis
Customer Motivations
What elements of the product/service do customers value most?
What are the customers objectives? What are they really buying?
How do segments differ in their motivation priorities?
What changes are occurring in customer motivation? In customer
priorities?
Figure 3.2
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Chapter 2 - External andCustomer Analysis
PPT 2-27
Customer Motivation Analysis
IdentifyMotivations
Group andStructure
MotivationsAssess
MotivationImportance
Assign StrategicRoles to Motivations
Figure 2.6
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The Customer as Active Partner
Encourage Active Dialogue
Mobilize Customer Communities
Manage Customer Diversity
Co-creating Personalized Experiences
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Customer Analysis
Unmet Needs
Why are some customers dissatisfied? Why are some
changing brands or suppliers?
What are the severity and incidence of consumer problems?
What are the unmet needs that customers can identify? Are
there some of which consumers are unaware?
Do these unmet needs represent leverage points for
competitors?
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Key Learnings
External analysis should influence strategy by identifying opportunities,
threats, trends, and strategic uncertainties. The ultimate goal is to improve
strategic choicesdecisions as to where and how to compete.
Segmentation (identifying customer groups that can support different
competitive strategies) can be based on a variety of customercharacteristics, such as benefits sought, customer loyalty, and applications.
Customer motivation analysis can provide insights into what assets and
competencies are needed to compete, as well as indicate possible SCAs.
Unmet needs that represent opportunities (or threats) can be identified byprojecting technologies, by accessing lead users, by ethnographic
research, and by interacting with customers.
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Cha ter 2 - External and Customer Anal sis PPT 2-31
Ancillary Slides
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Cha ter 2 - External and Customer Anal sis PPT 2-32
Chance favors the prepared mind.- Louis Pasteur
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Cha ter 2 - External and Customer Anal sis PPT 2-33
Far better an approximate answer tothe right question, which is oftenvague, than an exact answer to the
wrong question, which can always bemade precise.
- John Tukey,
Statist ician
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Cha ter 2 - External and Customer Anal sis PPT 2-34
If you dont know where you aregoing, you might end up
somewhere else.
- Casey Stengel
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3.2 Competitor Analysis
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Cha ter 3 - Com etitor Anal sis PPT 3-36
Competitor Identification
Customer-Based Approaches
Customer choicesWhat brand would you buy ifyour favorite was unavailable?
Application associationsWhat applications?
What brands for each application?
What product substitutes?
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Cha ter 3 - Com etitor Anal sis PPT 3-37
Competitor Identification
Strategic Groups
Pursue similar competitive strategies Have similar characteristics
Have similar assets and competencies
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Cha ter 3 - Com etitor Anal sis PPT 3-38
Competitor Analysis
Potential Competitors: Market expansion
Product expansion
Backward integration
Forward integration
Export assets or competencies
Retaliatory or defensive strategies
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Cha ter 3 - Com etitor Anal sis PPT 3-39
Understanding the Competitors
Objectives andCommitment
Image andPositioning
Size, Growth& Profitability
Current andPast Strategies
Strengths andWeaknesses
Cost Structure
Exit Barriers Organizationand Culture
CompetitorActions
Figure 3.2
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Cha ter 3 - Com etitor Anal sis PPT 3-40
Relevant Assets and Competencies
1) -What businesses have been successful over
time?
-What assets or competencies contributed
to their success?
-What businesses have had chronically low
performance?
-Why?
-What assets or competencies do they lack?
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Cha ter 3 - Com etitor Anal sis PPT 3-41
2) -What are the key customer motivations?
-What is needed to be preferred?
-What is needed to be considered?-What is really important to the customer?
3) What assets and competencies represent
industry mobility (entry and exit) barriers?
Relevant Assets and Competencies
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Cha ter 3 - Com etitor Anal sis PPT 3-42
4) -What are the significant value added
components in the value chain?
-Do any provide the potential to generate
a competitive advantage?
Relevant Assets and Competencies
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Cha ter 3 - Com etitor Anal sis PPT 3-43
Key Learnings
Competitors can be identified by customer choice (the set from which customersselect) or by clustering them into strategic groups (firms that pursue similar
strategies and have similar assets, competencies, and other characteristics). In
either case, competitors will vary in terms of how intensely they compete.
Competitors should be analyzed along several dimensions, including their size,
growth and profitability, image, objectives, business strategies, organizationalculture, cost structure, exit barriers, and strengths and weaknesses.
Potential strengths and weaknesses can be identified by considering the
characteristics of successful and unsuccessful businesses, key customer
motivations, mobility barriers, and value-added components.
The competitive strength grid, which arrays competitors or strategic groups on
each of the relevant assets and competencies, provides a compact summary of
key strategic information.
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Chapter 3 - CompetitorAnalysis PPT 3-44
Ancillary Slides
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Cha ter 3 - Com etitor Anal sis PPT 3-45
Induce your competitors not to
invest in those products, marketsand services where you expect to
invest the most that is the
fundamental role of strategy.- B ruce Henderson
Founder of BCG
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Cha ter 3 - Com etitor Anal sis PPT 3-46
There is nothing more
exhilarating than to be shot atwithout result.
- Winston Chu rch i ll
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Cha ter 3 - Com etitor Anal sis PPT 3-47
The best and fastest way to learn
a sport is to watch and imitate achampion.
- Jean-Claude Kil ly,Skier
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Cha ter 3 - Com etitor Anal sis PPT 3-48
There is one rule for industrialists
and that is: Make the best quality ofgoods possible at the lowest cost
possible, paying the highest wages
possible.- Henry Ford
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Cha ter 3 - Com etitor Anal sis PPT 3-49
We often give our enemies the
means for our own destruction.
- Aesop
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Cha ter 3 - Com etitor Anal sis PPT 3-50
In business, the competition will
bite you if you keep running, if youstand still, they will swallow you.
- Wi ll iam Knudsen
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THE END