COMPETITOR

ANALYSIS
NILAMADHAB MOHANTY
CIMP
WE WILL DISCUSS…
 How can we identify primary competitors?
 How should we analyze competitors’ strategies,
objectives, strengths, and weaknesses?
 How can market leaders expand the total market and
defend market share?
CREATING COMPETITIVE
ADVANTAGE
Competitive advantages require delivering more value
and satisfaction to target consumers than competitors.
Competitor analysis is the process of identifying,
assessing, and selecting key competitors.
Competitive marketing strategies are how companies
analyze their competitors and develop value-based
strategies for profitable customer relationships.
COMPETITOR ANALYSIS
WHO ARE YOUR
COMPETITORS…
 All firms making the same product or class of products
 PCs : Dell, HP

 All firms making products that supply the same service

 Firms that make substitutes for your products – PCs- laptops-
tablets- e-readers- smart phones
 All firms competing for the same consumer dollars
 E.g. Search engine – Google, Yahoo, Bing
 Online and mobile access to the digital world – Google, Apple
Samsung, Microsoft, Amazon, Facebook
PORTER’S FIVE FORCES DETERMINING
SEGMENT STRUCTURAL ATTRACTIVENESS
Potential
Potential Entrants
Entrants
(Threat
(Threat of
of
Mobility)
Mobility)

Suppliers
Suppliers Industry Buyers
(Supplier
(Supplier power)
power) Competitors (Buyer power)
(Segment rivalry)

Substitutes
(Threats of
substitutes)
PORTER’S FIVE FORCES-
SIGNIFICANCE
 The collective strength of these forces determines the
ultimate profit potential of an industry
 The key to growth and survival
 Solidifying relationship with profitable customers by
 Differentiating the product( through either redesigning or
marketing),
 By integrating operations, or by gaining technical leadership
ANALYZING COMPETITORS
Objectives

Strategies

Competitor
Actions

Reaction
Patterns Strengths &
Weaknesses
ASSESSING COMPETITORS

• Profitability • Overall cost leadership

• Market share growth • Differentiation
• Cash flow • Focus
• Technological • Middle of the road
leadership
• Service leadership

Competito
strategies
rs’
rs’
objectives
Competito

es
Estimating
weakness
competito
and
rs’
strengths
reactions
rs’
Competito
• What can our • What will our
competitors do? competitors do?
• Benchmarking
SUMMING UP
 Identify competitors – tomorrow’s as well as todays’
 Understand the strategies and objectives of your
competitors
 Create a position map to understand where key
competitors are concentrating their product development
and marketing efforts
 Develop a relative strengths table to rate the strengths
and weaknesses of each competitor on key market
dimensions
 Determine how each key competitor reacts to moves
by you and other firms. Is it slow to react or aggressive in
the offense or will it fight hard to defend its turf?
 POSITION MAP

Company1 Company 2 Company 3 Company 4

PoP

PoD

Reason to
believe
REASON TO BELIEVE, POP &
POD
 Points-of-parity (POPs)
 Attribute or benefit associations that are not necessarily
unique to the brand but may in fact be shared with other
brands
 Points-of-difference (PODs)
 Describes how your brand or product benefits customers in
ways that set you apart from your competitors
 This is a statement providing compelling evidence and
reasons why customers in your target market can have
confidence in your differentiation claims
 POD CRITERIA
 Desirability
 Consumers must see the brand association as personally relevant
to them
 Relevance
 Distinctiveness
 Believability

 Deliverability
 The company must have the internal resources and commitment
to feasibly and profitably create and maintain the brand
association in the minds of consumer
 Feasibility
 Communicability
 Sustainability

 Differentiability
 Consumers must see the brand association as distinctive and
superior to relevant competitors
 RELATIVE STRENGTH TABLE

Company1 Company 2 Company 3 Company 4

New
product
dynamism
Distribution

Customer
service
Customer
satisfaction
 UNDERSTANDING COMPANY’S
RESPONSE
Company1 Company 2 Company 3 Company 4

Aggressive offense

Aggressive defense
Slow in defensive
response
Willing to cut prices
to attack or defend

Will match
promotions
AGGRESSIVE STRATEGY
 Continue to invest in innovation to sustain and build the
competitive advantage which exists.
 Cover any moves made by competitors to develop alternative
competitive advantages. Close off the opportunities to build a
differentiated value proposition that may prove attractive to
segments of the market.
 Aggressively build market share by moving above the fair value
line in the customer value map
 Raise the stakes for other competitors to play the game. This may
be through rapid product innovations, marketing campaigns or
reducing prices to levels that competitors find difficult to match.
 Grow within the market through acquisitions.
 Follow up on possible opportunities in the market including
backward or forward vertical integration
 Move into related markets which complement the existing
position.
DEFENSIVE STRATEGY IN
BUSINESS
 Cost cutting
 Capacity reduction
 Cash generation from the sale of unnecessary inventory
and equipment
DEFENSIVE STRATEGY FROM WARFARE
 The fortified position defence –
 Building barriers to entry to make it difficult to be attacked

 Mobile defence –
 Work to identify new market segments and supply tightly
focused products solutions to particular customers wants and
needs
 Flanking defence –
 If you fear an attack at the low price end, you can introduce
your own fighter brand as a deterrent. It might take some of
your sales away from your middle market brand but it may
block a new competitor or make things much more difficult.
 Counter attack –
 Sometimes it is better to response outside or your own market
for fear of sparking a price war that damages all your sales in
the core market so to send a signal to the aggressor, you can
attack in their core market and cause them as much or more
trouble as they are causing you.
 COMPETITOR ANALYSIS
TEMPLATE
Company1 Company 2 Company 3 Company 4

Competitor Profile
Competitive Advantage
Target Market
Market Share
Marketing Strategies
Product/Service Profile
Pricing and Costs
Distribution Channels
SWOT Analysis
SELECTING COMPETITORS TO
ATTACK AND AVOID
 Customer value analysis determines the benefits that target
customers’ value and how customers rate the relative value of
various competitors’ offers.
 Identification of major attributes that customers value and the
importance of these values
 Assessment of the company’s and competitors’ performance on the
valued attributes
 Selecting competitors
 Close or distant competitors
 Those that resemble them most
 Good or bad competitors
 Good competitors play by the rules of the industry
 Bad competitors break the rules

 Finding Uncontested Market Spaces – Blue Ocean Strategy

 Netflix???
 iTunes???
 IPL???
MARKETING STRATEGY
BASIC COMPETITIVE
STRATEGIES
Michael Treacy and Fred Wiersema suggest companies can gain
leadership positions by delivering superior value to their
customers in three strategies or “value disciplines.”
 Operational excellence

 Company provides value by leading its industry in price and

convenience by reducing costs and creating a lean and
efficient value delivery system
 Customer intimacy

 Company provides superior value by segmenting markets

and tailoring products or services to match the needs of the
targeted customers.
 Product leadership

 Company provides superior value by offering a continuous

stream of leading-edge products or services. Product leaders
are open to new ideas and solutions and bring them quickly
to the market
COMPETITIVE POSITIONS
Market
leader
strategies

Market
nicher
Competitive Market
follower
strategies Positions strategies

Market
challenger
strategies
 HYPOTHETICAL MARKET
STRUCTURE & STRATEGIES
Market
nicher

Market Market Market

leader challenger follower

40% 30% 20% 10%

Expand Market Attack leader Imitate Special-

Defend Market Share Status quo ize

Expand Market Share

 custo
mer,
mark
et,qu
ality,
Strategies
• price,
servi
Market Nicher
Follo
ce
w
• Multi
closel
ple
y
Strategies
• nichi
ng
Follo
Market Follower
• Full
w at
front
• a
al
Expa
Strategies
dista
attac
nd
nce
k
total
Challenger
• Indire
mark Market
ct
et
• attac
Prote
k
ct
Strategies
mark
et
Market Leader
share
• Expa
nd
mark
et
COMPETITIVE POSITIONS
share
COMPETITOR STRATEGIES
MARKET LEADER
STRATEGIES
Expand total market demand by developing:
 New users
 New uses
 More usage
Protect current market by:
 Fixing or preventing weaknesses that provide opportunities to
competitors
 Maintaining consistent prices that provide value
 Keeping strong customer relationships
 Promoting continuous innovation
Expand market share by:
 Increasing profitability with increasing market share in
served markets
 Producing high-quality products
 Creating good service experiences
 Building close relationships
MARKET CHALLENGER
STRATEGIES
Challenge the leader with an aggressive bid for more
market share.

Second mover advantage: Challenger observes what

has made the leader successful and improves on it.
MARKET FOLLOWER
STRATEGIES
 Play along with competitors and not rock the boat
 Copy or improve on leader’s products and programs with
less investment
 Bring distinctive advantages
 Keep costs and prices low or quality and services high
MARKET NICHER STRATEGIES

An ideal market niche is big enough to be profitable with

high growth potential and has little interest from
competitors.

The key to market niching is specialization:

 Market
 Customer
 Product
 Marketing mix

 For example, car-sharing nicher Zipcar has carved out its

own small profitable corner of the huge car-rental market.
MARKET CHALLENGER
STRATEGIES
 Define the strategic objective and opponents
 Choose a general attack strategy
 Frontal attack
 Flank attack
 Encirclement attack
 Bypass attack
 Guerilla warfare
 Choose a specific attack strategy
 Price discounts
 Lower-priced goods
 Value-priced goods
 Prestige goods
 Product proliferation
 Product innovation
 Improved services
 Distribution innovation
 Manufacturing-cost reduction
 Intensive advertising promotion
MARKET FOLLOWER
STRATEGIES
 Counterfeiter
 Cloner
 Imitator
 Adapter
REFERENCES
 Principles of Marketing, by Philip Kotler, Gary Armstrong,
Prafulla Agnihotri, 17th Edition, Pearson (KAA,17e)
 Kotler, Philip, Kevin Keller, Abraham Koshy, and
Mithileshwar Jha. "Marketing management,(South Asian
Perspective), Dorling Kindersley (India) Pvt." Ltd.
Licensees of Pearson Education in South Asia (2009).
QUESTION
S,
COMMENT
S,
CONCERNS
?