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Competitive Analysis Competitive Analysis
and Product and Product PositioningPositioning
Competitors
Direct competitorsDirect competitors Indirect competitorsIndirect competitors
Local competitorsLocal competitors Cross-over competitorsCross-over competitors
Identifying the Competitors -1
Product
Direct Indirect
Industry
Cross-Over
Local
Identifying the Competitors -2
Products’ feature and qualityProducts’ feature and quality CRM strategiesCRM strategies R&D strategiesR&D strategies Marketing mixMarketing mix
– PricePrice– PromotionPromotion– DistributionDistribution– Supply-chain managementSupply-chain management
Competitor Profiling — Eastman Kodak
Eastman KodakEastman Kodak
PurchaseCamera
Purchase Film
Take Pictures
Digitally ManipulatePictures
Print and Receive Pictures
SharePictures
Store Pictureson CD
Purchase Accessories
Download and Choose Pictures
to Print
HP
Olympus
Snapfish
Moto Photo
Geocities
Seattle Filmworks
District
Ofoto
HP
AdobeSystems
Fuji
cameraworks.com
Snapfish
Shutterfly
Direct Competition
IndirectCompetition
COMPETITIVE ANALYSIS FLOWS OUT OF CUSTOMER
ANALYSIS
Understand customers needs and wantsUnderstand customers needs and wants Identify current and potential competitorsIdentify current and potential competitors Perform industry analysis, identify suppliers Perform industry analysis, identify suppliers
and common intermediariesand common intermediaries Understand your competitorsUnderstand your competitors Determine competitor strategies (present and Determine competitor strategies (present and
future)future)
COMPETITORS TO CONSIDER
CURRENTCURRENT– market structure analysismarket structure analysis– perceptual analysisperceptual analysis
POTENTIALPOTENTIAL (potential entry of new competitors)(potential entry of new competitors)– remain alert to their possibilityremain alert to their possibility– depends ondepends on
• barriers to entrybarriers to entry• expectations about competitive reactionsexpectations about competitive reactions
An Example:
Using a Perceptual Map for Competitor Analysis
• Lincoln
• Cadillac•Mercedes
•Chrysler•Buick
• Oldsmobile
A touch of class / a car to be proud to own
Practical / affordable / good gas mileage
Conservative looking / appeals to older people
Fun to drive / sporty look / appeals to
younger people
•Porsche
•BMW
•Pontiac
•Chevrolet
•Nissan
•Toyota
•VW
•Ford
•Dodge
•Plymouth
BARRIERS TO ENTRY OF NEW COMPETITORS
Economies of ScaleEconomies of Scale Lack of Product DifferentiationLack of Product Differentiation Capital RequirementsCapital Requirements Access to Distribution ChannelsAccess to Distribution Channels Buyer Switching CostsBuyer Switching Costs Government Policies and RegulationsGovernment Policies and Regulations
COMPETITIVE RELATIONS
CONFLICTCONFLICT
COMPETITIONCOMPETITION
COEXISTENCECOEXISTENCE
COOPERATIONCOOPERATION
COLLUSION COLLUSION
CONFLICT WITH COMPETITORS
Focus on opponentFocus on opponent Market is viewed as a zero-sum game Market is viewed as a zero-sum game
(one gains only by taking from another)(one gains only by taking from another) Competitors’ objectives are mutually Competitors’ objectives are mutually
inconsistentinconsistent
COMPETITION
Focus on winning something Focus on winning something (usually customers)(usually customers)
Depends onDepends on– market attractivenessmarket attractiveness– industry structureindustry structure– commitment of competitorscommitment of competitors– technology requiredtechnology required– product differentiationproduct differentiation
COMPETITOR COEXISTENCE
Working Toward a Goal Independent of OthersWorking Toward a Goal Independent of Others
Different Niches of Market AvailableDifferent Niches of Market Available
COOPERATION
Involves working Involves working together toward a together toward a common goalcommon goal
Three main typesThree main types– DyadicDyadic
– Joint ActivityJoint Activity
– Investment in a Investment in a Third PartyThird Party
THREE TYPES OF COMPETITOR COOPERATION
Formal Cooperation
Dyadic Joint activity Investment in third party
• Ownership
• Interlocking directorship
• Formal exchanges
• Subcontracting
• Reciprocity
• Production
• Sourcing
• R&D
• Promotion
• Consortia
• Joint ventures
• Trade associations
COLLUSION Cooperative Behavior Designed to Cooperative Behavior Designed to
Injure a Third PartyInjure a Third Party• customerscustomers
• supplierssuppliers
• non-colluding competitorsnon-colluding competitors
• general publicgeneral public
Can be Direct or IndirectCan be Direct or Indirect
Often IllegalOften Illegal
GATHERING COMPETITIVE DATA
Establish information-gathering systemEstablish information-gathering system
Identify your competitorsIdentify your competitors
Perform a competitive auditPerform a competitive audit
Evaluate results of the auditEvaluate results of the audit
Regularly integrate into planning Regularly integrate into planning
processprocess
HOW DO YOU COMPETE?
Offensive StrategiesOffensive Strategies– Concentrate on the competitors’ relative Concentrate on the competitors’ relative
weaknessesweaknesses– 5 types5 types
Defense StrategiesDefense Strategies– Goal is to counter each offensive strategyGoal is to counter each offensive strategy– 6 types6 types
OFFENSIVE STRATEGIES
1) Frontal attack1) Frontal attack– direct confrontationdirect confrontation– most difficult and most difficult and
dangerousdangerous
2) Flanking attack2) Flanking attack– addresses gaps in addresses gaps in
competition’s market competition’s market coveragecoverage
– Niche marketNiche market
3) Encirclement3) Encirclement – forcing competitor to forcing competitor to
spread resources thin by spread resources thin by probing on many fronts at probing on many fronts at onceonce
4) Bypass attack4) Bypass attack– avoids confrontationavoids confrontation– diversificationdiversification
5) Guerrilla warfare5) Guerrilla warfare– small, intermittent attackssmall, intermittent attacks
DEFENSE STRATEGIES
1) Position Defense1) Position Defense– fortify firm’s existing positionfortify firm’s existing position
2) Mobile Defense2) Mobile Defense– Market broadeningMarket broadening
3) Preemptive Defense3) Preemptive Defense– Attacking first (first strike)Attacking first (first strike)
4) Flank-positioning4) Flank-positioning– extend firm’s offerings into extend firm’s offerings into
new segments to protect new segments to protect existingexisting
5) Counter-offensive 5) Counter-offensive Defense Defense– gathering resources and gathering resources and
counter-attacking when counter-attacking when threatenedthreatened
6) Strategic Withdrawal6) Strategic Withdrawal
Partners
Complementary partnerComplementary partner
Capability partnerCapability partner