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28 Cards in this Set
- Front
- Back
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ROLE OF COMPETITOR ANALYSIS Wilson & Gilligan (1997) |
-To help management understand their competition advantages and disadvantages relative to competitors. -To generate insight into competitors past, present and potential strategies. -To give an informed basis for developing future strategies to sustain or establish advantages over competitors. -To assist with the forecasting of the returns on strategic investments for identifying between alternative strategies. |
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WHY COMPETITOR ANALYSIS IS IMPORTANT |
- Price Cuts - Launching of a rival product - Aggressive expansion of production which reduces the firms market sales - Inclusion of costly modifications to the product which the firm must also understand |
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PORTERS COMPETITOR ANALYSIS FRAMEWORK Model |
(1) Identifying competitors strategy (2) Identifying competitors objectives (3) Identifying a competitors assumptions about the industry (4) Identifying the competitors resources and capabilities |
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PORTERS COMPETITOR ANALYSIS FRAMEWORK Identifying Competitors Strategy |
This can be identifiable from what a company says and does. More often than not a what they do will be more important that what they say. |
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PORTERS COMPETITOR ANALYSIS FRAMEWORK Identifying Competitor Objectives |
Knowledge of competitors goals is an essential component of any analysis. Whether they are driven by short-term cash or profit or whether they have the reserves to focus on long-term objectives of will result in different behaviors. |
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PORTERS COMPETITOR ANALYSIS FRAMEWORK Identifying a Competitors Assumptions about the Industry |
A competitors decisions are governed by their perceptions and assumptions about industry structure and the players with whom they compete. These perceptions will often be driven by the value systems of the senior management. |
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PORTERS COMPETITOR ANALYSIS FRAMEWORK Identifying the Competitors Resources and Capabilities |
Without rigours analysis of resources that a competitor possesses there can be no realistic prediction of the seriousness of a possible challenge. |
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COMPETITOR ANALYSIS KEY CONCEPTS |
- Market Size - Market Growth - Market Share |
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BCG MODEL Strategies Recommended |
- Cash cows flows to be used to support stars and develop question marks. - Cash cows to be defended. - Weak uncertain question marks should be divested to reduce cash demand. - Dogs should be divested, harvested or niched . - If portfolio is unbalanced, consider acquisitions and divestments. - Harvesting reduces damage of sudden divestment but reduces the value of eventual disposal. - SBU to have different growth targets and objectives and not subject to same strategic control systems. |
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BCG MODEL Cash Cows |
- Usually a cash generator and profitable. - Often cost leaders as produces economies of scale. - Low capital requirements. - Profits from this area can be used elsewhere. - Defensive strategy. |
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BCG MODEL Star |
- Usually market leader - Offer attractive long term prospects - Requires large investment in non current assets to defend against competitors. |
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BCG MODEL Question Marks |
- Opportunity exists but is unknown. - May need heavy investment. - Could become a star. |
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BCG MODEL Dogs |
- Could turn into a niche product. - Often divested or carries at a loss leader. - To cultivate would require substantial investment and would be risky. |
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BCG MODEL Limitations |
- Simplistic, only covers 2 variables. - Connection between market share and cost savings is not strong. - Cash cows do not always generate cash. - Fails to consider value creation. |
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LEVELS OF COMPETITION Kotler (2008) |
Brand competition - offer similar products to the same competition and have a similar size. Industry competition - Suppliers who produce similar goods but are not the same size. Form competition - Suppliers whose products satisfy the same needs, although technically different. Generic competition - Competitors who compete for the same income as the company. |
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LEVEL OF THREAT POSED BY COMPETITION |
The extent to which competitors pose a threat depends on: - Number of rivals and extent of differentiation in the market. - Entry and mobility barriers. - Cost structure. - Degree of vertical integration. |
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COMPETITOR INFORMATION Types of information |
- Competitor strategy - Competitor goals and objectives - Competitor products and services - Competitor resources and capabilities. |
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COMPETITOR INFORMATION Types of information |
- Competitor strategy - Competitor goals and objectives - Competitor products and services - Competitor resources and capabilities. |
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COMPETITOR INFORMATION Types of information |
- Competitor strategy - Competitor goals and objectives - Competitor products and services - Competitor resources and capabilities. |
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COMPETITION INFORMATION Flesh and Benaoussan (2002) |
- Products and services - Marketing - Human resources - Operations - Management profiles - Sociopolitical - Technology - Organisational structure - Competitive intelligence capacity - Strategy - Customer value analysis - Financial |
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COMPETITION INFORMATION Source of information |
- Website of competitor. - Annual reports and accounts of competitors. - Newspaper arrivals/online news sites. - Magazine and Journals - Becoming a customer of the competitor. - Market research reports and reviews. - Customer market research. |
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COMPETITOR INFORMATION Sources of information Tudor (1992) |
(1) Primary Sources - Annual reports - Newspaper and Journals - Statistical sources - Patents registered (2) Secondary Sources - Market research reviews - Government publication - Grey literature (3) Computer Based Information - Online databases - Internet Resource |
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TYPES OF RESEARCH |
- Qualitative Research - Quantitative Research - Non-Financial Research - Rankings and Ratings - Benchmarking - Financial Benchmarking |
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BIG DATA Definition |
Large volumes of data beyond the normal processing, storage and analysis capacity of typical database application tools. |
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BIG DATA The Three V's |
Velocity - Data is now streaming from sources such as social media at a virtually constant rate. Unable to generate meaningful real time analysis. Volume - More sources of data to increase the volume of data to a potentially unmanageable level. Variety - Traditionally stored as Excel or standard database. Now come in a wide variety of formats. |
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BIG DATA Importance |
Importance of big data - Innovation and improved product development - More informed decision making - Better market segmentation Importance in competitor analysis - Gain insight of customer behaviours through monitoring social media, can engage advocators and detractors. - Can monitor data from machines to determine usage and wear. Allows predictions of optimal replacement cycle. - Can use data on customer activity to segment customer base and accurately target individuals. |
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BIG DATA examples |
- Social network traffic - Web server log - Traffic flow monitoring - Satellite imagery - Streamed audio content - Banking transactions - Audio downloads - Web page content - Government documentations - GPS tracking |
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BIG DATA Risks |
- Availability of skills to use big data systems. There is also an increasing need to combine data analysis skills with deep understanding of the industry. - Security of data is a major concern in the majority of organisations. - Data protection - There is a risk that valuable time is spend measuring relationships that have no organisational value. - There may be technical difficulties with integration with existing warehouse systems with Hadoop systems. |
