SM Unit 4 – Competitor Analysis and Strategies upload (1).pptx

Competitor Analysis

1. Unit 4 – Competitor Analysis and Strategies Alex

2. Syllabus Competitor Analysis and Strategies Purposes of competitor analysis; competitor response profile; Michael Porter’s analysis of competitive structure of industry; generic competitive strategies; blue ocean strategy.

3. Introduction - competitors Using organizational capability and core competencies as a part of strategic planning Create sustainable competitive advantage and value Overtake competitors and develop competitive strategies Understanding various competitive strategies

4. 18- 4 Definition Competitive Advantage An advantage over competitors gained by offering consumers greater value than competitors offer.

5. 18- 5 Definition Competitive Analysis The process of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.

6. 18- 6 Steps in Analyzing Competitors

7. 18- 7 Competitor Analysis Firms face a wide range of competition Be careful to avoid “competitor myopia” Methods of identifying competitors: Industry point-of-view Market point-of-view Competitor maps can help Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid Steps in the Process:

8. Competitive dimensions Cost Quality Delivery speed Delivery reliability Flexibility New product speed After sale Colour, size, weight

9. Purpose of competitor analysis To identify the competitors To understand the current strategies of competitor Future goals and future strategies Understand the force behind the competitor Understand the weaknesses and vulnerabilities of the competitors To develop different response strategies

10. Intro : Micheal E Porter’s structural analysis of industries Book : Competitive Strategy, Competitive Advantage and Competitive Advantage of Nations Provides structural analysis of industries State of competition 5 basic competitive forces Four diagnostic components Competitor Response profile

11. Structural analysis of industries Rivalry among existing firms Threat of new entrants Threat of substitutes Bargaining power of suppliers Bargaining power of buyers

12. Structural analysis and competitive strategy Positioning of firms and providing defence Improving the positioning Exploiting change

13. Strategic groups Groups of firms in an industry following the same or similar strategy along the strategic dimensions Direct competitors are the firms in the strategic group Competition intensity vary from group to group High mobility barriers Mobility barriers can change

14. Four diagnostic components – Porter’s framework for competitor analysis Future goals Current strategy Assumptions Capability

15. Competitor Response profile Based on analysis of the 4 diagnostic components Firms can prepare a competitor response profile This shows how a competitor will respond or what actions will the competitor will take when it is provoked This provides predictions into the tactics and strategies of competitors

16. Generic competitive strategies

17. Strategic Positioning Generic competitor strategies lead to strategic positioning The essence of strategies is choosing to perform the activities differently or choosing different activities Positioning its self based on the activities in the minds of the customers Unique positioning leads to competitive advantage To make it sustainable competitive advantage there are two conditions Trade off Fit

18. Four routes of strategic advantages Strategy based on KFS Strategy based on relative superiority Strategy based on aggressive initiative Strategy based on SDF

19. The Book and the Authors Prof Renee Mauborgne © JOHN ABBOTT Prof Chan Kim © JOHN ABBOTT

20. New Market Space Red oceans and blue oceans make up market universe Red oceans: all industries in existence = known market space Blue oceans: all industries not in existence = unknown market space

21. Red Oceans vs. Blue Oceans Red oceans Industry boundaries defined and accepted Competitive rules of game known Companies try to outperform rivals; cutthroat competition As market space gets crowded, prospects for profit and growth reduced Red ocean strategy is a market-competing strategy Blue oceans Undefined market space, demand creation, opportunity for highly profitable growth Most are created from within red oceans by expanding existing industry boundaries Rules of game waiting to be set Competition irrelevant Blue ocean strategy is a market-creating strategy

22. The Rising Imperative of Creating Blue Oceans Supply is exceeding demand in most industries Global competition is intensifying Problems: Increasing price wars Shrinking profit margins Red oceans becoming bloodier, need to be concerned with creating blue oceans

23. Formulating and Executing Blue Ocean Strategy Six Principles of Blue Ocean Strategy Reconstruct market boundaries Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Overcome key organizational hurdles Build execution into strategy

24. Take Aways Red ocean strategy is a market-competing strategy, while blue ocean strategy is a market-creating strategy As red oceans are becoming bloodier, we need to create more blue oceans “The only way to beat the competition is to stop trying to beat the competition!”

25. Thank You