Competitor Analysis. Course Objectives Explain What is Competitor Analysis List the Dimensions in...
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Transcript of Competitor Analysis. Course Objectives Explain What is Competitor Analysis List the Dimensions in...
Competitor Analysis
Course Objectives• Explain What is Competitor Analysis• List the Dimensions in Competitor
Analysis• List the Objectives of Competitor Analysis• Explain Competitor Analysis in Strategic Planning• List the Benefits of Competitor Analysis• Explain the Steps of Competitor Analysis• Explain How to Identify Current & Potential Competitor• List the Sources of Potential Competitors• Explain What is Competitor Profiling
• Explain What is CSF Analysis• Explain SWOT Analysis for Competitor
Analysis• Explain How to Conduct Environmental Scanning• Explain Porter’s Five Forces Model of Competition
• Explain the Blind Spots in Competitor Analysis
• Explain What is Competitive Advantage
Introduction
Schindler Inc. is a leading manufacturer of electrical safety equipments such as Miniature Circuit Breakers (MCBs), Molded Case Circuit Breaker (MCCBs) etc. for the past six decades. It has carved a niche for itself in this area and captures the largest market share in its industry and segment.
Introduction
However, now Schindler wants to venture into the mobile and Smartphone market.
It has decided to launch a range of mobiles and Smartphone that will cater to the various segments of the society.
Introduction
What do you think Schindler should do to become successful in its venture?Yes, a careful and thorough competitor analysis will help Schindler recognize its position in the market, its competitors, and challenges etc. to help it become successful in its new venture.
Introduction
Hence, analyzing its competitors will help Schindler to discover its weaknesses, to identify opportunities for and threats to the organization from the industrial environment.
Introduction
Competitor analysis is a driver of an organization’s strategy and effects on how firms act or react in their sectors. The organization does a competitor analysis to measure/assess its standing amongst the competitors.
Introduction
Hence, you can understand that ‘Competitor Analysis’ is extremely crucial and the management should have a thorough knowledge and analysis of the general and competitive environment of the organization in order to make an organization successful.
Let us learn about ‘Competitor Analysis’ in detail.
What is Competitor Analysis?
Organizations always operate within a competitive industry environment.
They do not exist in vacuum.
Analyzing an organization’s competitors helps an organization to discover its weaknesses, to identify opportunities for and threats to the organization from the industrial environment.
Environment Influences on BusinessCompetitor Analysis should involve a thorough analysis of the macro-environment of a business. Thus, Competitor Analysis should analyze the four external influences on a competitors’ and his own business such as:
Economic
Social
Political
Technological
Role of Competitor Analysis in Strategic Planning
Competitor Analysis helps in strategic planning in the following manner:
It is a source of information for strategic planning.
It helps in setting of objectives for strategic planning.
Competitor Analysis provides information that helps in synchronizing the firm’s resources and capabilities with the competitive environment.
Competitor Analysis is crucial in designing effective strategies for the
business. Competitor Analysis helps:
• In the value creation opportunities of a strategy.
• To assess the market including competitors from the stand point of a
particular business.
• To make contingency plans for threats.
• To evaluate the impact of the external environment on a firm’s
objectives and strategy.
Benefits of Competitor Analysis
Steps of Competitor AnalysisThe following are the steps to be conducted for carrying out a Competitor Analysis:
Let us now look at each in detail.
1Step 1: Identify Potential Competitors
2Step 2: Carry out a thorough Competitor Profiling
3Step 3: Understand Competitors’ Strategies
4Step 4: Analysis of Strengths and Weaknesses against Competitors
5Step 5: Assess Market Attractiveness
6Step 6: Analyze Sources of Competitive Advantage
7Step 7: Design Competitive Strategies
• Market-based Analysis
Market-based Analysis
Hence, the competition faced by companies has been classified based on the degree of product substitution in the following categories:
Let us look at each in detail.
Industry Competition
Brand Competition
Product Competition
Generic Competition
Look at the given table which shows the Critical Success Factor (CSF) of a company for an ‘Automobile Industry’.
CSF Analysis
CSF for Automobile IndustryCritical Success Factor
Company Competitors
A B C D
Engine Technology 8 7 9 7 5Styling and Features 9 8 9 6 9Brand Reputation 10 8 9 5 6Strong Distribution Network
7 8 8 8 8
Efficient Manufacturing
8 8 7 7 9
Effective Marketing 9 8 10 5 4
Repetition
National Environment
Composition
Industry Environment
Macro -Environment
National Environment:
Analyzing the national environment needs an appraisal of whether the national framework helps in achieving competitive advantage in the globalized environment.
National Environment
Threat of Substitute Products/Services
Bargaining Power of Suppliers
Bargaining Power of Buyers
Rivalry among Current Competitors
Risk of Entry by Potential Competitors
Risk of Entry by Potential Competitors
Rivalry among Current Competitors
Bargaining Power of Buyers
Bargaining Power of Suppliers
Threat of Substitute Products/Services
Risk of Entry by Potential Competitors
Potential competitors mean the firms which are not currently competing in the industry but have the potential to do so, if given a choice. Entry of new players increases the industry capacity, begins a competition for market share and lowers the current costs. The threat of entry by potential competitors is partially a function of extent of barriers to entry.
• Searching Extensively for Competitors:
o It is critical for conducting an effective Competitor Analysis that you do not overlook any competitor, both current as well as future competitors.
o You should consider all competitors including the following: Product competitors Generic competitors Total budget competitors
• Searching extensively for competitors
Searching Extensively for Competitors
Mistaking Industry Boundaries
One of the greatest blind spots that strategists face in competitor analysis is that they wrongly define the industry boundaries.
Most of the times
organizations define their
industry around their
current products, customer
groups, and geographies.
This causes them to overlook their adjacent competitors who ultimately
enter their current space.
Mistaking Industry Boundaries
This is a DEMO Course On – Competitor Analysis.
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What Do you Get:
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