Strategic market management chapter 3

Chapter Three © 2007 John Wiley & Sons Competitor Analysis Copyright © 2010 John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein Chapter - Competitor Analysis PPT 3-1 Competitor Identification © 2007 John Wiley & Sons Customer-Based Approaches – Customer choices – What brand would you buy if your favorite was unavailable? – Application associations – What applications? What brands for each application? – What product substitutes? Chapter - Competitor Analysis PPT 3-2 Competitor Identification © 2007 John Wiley & Sons Strategic Groups – Pursue similar competitive strategies – Have similar characteristics – Have similar assets and competencies Chapter - Competitor Analysis PPT 3-3 Competitor Analysis Potential Competitors: – Market expansion – Product expansion © 2007 John Wiley & Sons – Backward integration – Forward integration – Export assets or competencies – Retaliatory or defensive strategies Chapter - Competitor Analysis PPT 3-4 Understanding the Competitors © 2007 John Wiley & Sons Size, Size,Growth Growth &&Profitability Profitability Strengths Strengthsand and Weaknesses Weaknesses Image Imageand and Positioning Positioning Competitor Competitor Actions Actions Exit ExitBarriers Barriers Chapter - Competitor Analysis Cost CostStructure Structure Figure 3.2 Objectives Objectivesand and Commitment Commitment Current Currentand and Past PastStrategies Strategies Organization Organization and andCulture Culture PPT 3-5 Relevant Assets and Competencies 1) -What businesses have been successful over time? © 2007 John Wiley & Sons -What assets or competencies contributed to their success? -What businesses have had chronically low performance? -Why? -What assets or competencies they lack? Chapter - Competitor Analysis PPT 3-6 Relevant Assets and Competencies © 2007 John Wiley & Sons 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? Chapter - Competitor Analysis PPT 3-7 Relevant Assets and Competencies © 2007 John Wiley & Sons 4) -What are the significant value added components in the value chain? -Do any provide the potential to generate a competitive advantage? Chapter - Competitor Analysis PPT 3-8 © 2007 John Wiley & Sons Key Learnings • Competitors can be identified by customer choice (the set from which customers select) 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, organizational culture, 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 Chapter - Competitor Analysis PPT 3-9 © 2007 John Wiley & Sons Ancillary Slides Chapter - Competitor Analysis PPT 3-10 © 2007 John Wiley & Sons “Induce your competitors not to invest in those products, markets and services where you expect to invest the most… that is the fundamental role of strategy.” Chapter - Competitor Analysis - Bruce Henderson Founder of BCG PPT 3-11 “There is nothing more exhilarating than to be shot at without result.” © 2007 John Wiley & Sons - Winston Churchill Chapter - Competitor Analysis PPT 3-12 “The best and fastest way to learn a sport is to watch and imitate a champion.” © 2007 John Wiley & Sons - Jean-Claude Killy, Skier Chapter - Competitor Analysis PPT 3-13 “There is one rule for industrialists and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.” © 2007 John Wiley & Sons - Henry Ford Chapter - Competitor Analysis PPT 3-14 “We often give our enemies the means for our own destruction.” © 2007 John Wiley & Sons - Aesop Chapter - Competitor Analysis PPT 3-15 “In business, the competition will bite you if you keep running, if you stand still, they will swallow you.” © 2007 John Wiley & Sons - William Knudsen Chapter - Competitor Analysis PPT 3-16 ... characteristics – Have similar assets and competencies Chapter - Competitor Analysis PPT 3- 3 Competitor Analysis Potential Competitors: – Market expansion – Product expansion © 2007 John Wiley... arrays competitors or strategic groups on each of the relevant assets and competencies, provides a compact summary of key strategic information Chapter - Competitor Analysis PPT 3- 9 © 2007 John Wiley... Analysis PPT 3- 12 “The best and fastest way to learn a sport is to watch and imitate a champion.” © 2007 John Wiley & Sons - Jean-Claude Killy, Skier Chapter - Competitor Analysis PPT 3- 13 “There