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Competitor analysis presentation

  1. Competitor Analysis With, Sharon Lindelwa Dube
  2. What exactly is competitor Analysis? § Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service. § Competitive analysis or competitive research is a field of strategic research that specializes in the collection and review of information about rival firms.
  3. Constructing a competitor array 1. Define the industry, scope and nature of the your are of specialty. For example insurance, mining, finance and banking, education, advertising, tell communication. 2. Determine who the competitors are. Formulate a list of top five in the country, scale it down to province narrowing to town. It helps in classifying them whether they are primary or secondary competitors. The whole point of this exercise is to see you where you stand, how much work has to be done to beat the best at their own game. 3. Determine who the customers are and what benefits they expect. This one is equally important because they customers / clients are what keep the brand moving and surviving thus they need to be impressed. Through them the brand is made or destroyed. Point is unlike one’s person life public perspective is of paramount importance 4. Determine the key strengths, for example price, service, convenience, inventory, etc.
  4. Competitor profile The strategic rationale of competitor profiling is simple. Superior knowledge of rivals offers a legitimate source of competitive advantage. The raw material of competitive advantage consists of offering superior customer value in the firm’s chosen market. The definitive characteristic of customer value is the adjective, superior. Customer value is defined relative to rival offerings making competitor knowledge an intrinsic component of corporate strategy.
  5. Why profile the rival though??
  6. Response v First, profiling can reveal strategic weaknesses in rivals that the firm may exploit. v v Second, the proactive stance of competitor profiling will allow the firm to anticipate the strategic response of their rivals to the firm’s planned strategies, the strategies of other competing firms, and changes in the environment. v v Third, this proactive knowledge will give the firms strategic agility. Offensive strategy can be implemented more quickly in order to exploit opportunities and capitalize on strengths. Similarly, defensive strategy can be employed more deftly in order to counter the threat of rival firms from exploiting the firm’s own weaknesses.
  7. Aspects to be looks at/ pay attention to Background • location of offices, plants, and online presences • history – key personalities, dates, events, and trends • ownership, corporate governance, and organizational structure Financials • P-E ratios, dividend policy, and profitability • various financial ratios, liquidity, and cash flow • profit growth profile; method of growth (organic or acquisitive) • Salary rates Products • products offered, depth and breadth of product line, and product portfolio balance • new products developed, new product success rate, and R&D strengths • brands, strength of brand portfolio, brand loyalty and brand awareness • patents and licenses • quality control conformance • reverse engineering
  8. Continuation Marketing • segments served, market shares, customer base, growth rate, and customer loyalty • promotional mix, promotional budgets, advertising themes, advertising agency used, sales force success rate, online promotional strategy • distribution channels used (direct & indirect), exclusivity agreements, alliances, and geographical coverage • pricing, discounts, and allowances Facilities • plant capacity, capacity utilization rate, age of plant, plant efficiency, capital investment • location, shipping logistics, and product mix by plant Personnel • number of employees, key employees, and skill sets • strength of management, and management style • compensation, benefits, and employee morale & retention rates Corporate and marketing strategies • objectives, mission statement, growth plans, acquisitions, and divestitures • marketing strategies
  9. The most important of resent media scanning • Scanning competitor's adverts can reveal much about what that competitor believes about marketing and their target market. • • Changes in a competitor's advertising message can reveal new product offerings, new production processes, a new branding strategy, a new positioning strategy, a new segmentation strategy, line extensions and contractions, problems with previous positions, insights from recent marketing or product research, a new strategic direction, a new source of sustainable competitive advantage, or value migrations within the industry. • • It might also indicate a new pricing strategy such as penetration, price discrimination, price skimming, product bundling, joint product pricing, discounts, or loss leaders. It may also indicate a new promotion strategy such as push, pull, balanced, short term sales generation, long term image creation, etc.
  10. The source of information that can be employed Different types of content can include: • Blog posts • Whitepapers • eBooks • Videos • Webinars • Podcasts • Slides/Powerpoints • Visual content • FAQs • Feature articles • Press releases • News • Case studies • Buyer guides
  11. Potential or new competition In addition to analysing current competitors, it is necessary to estimate future competitive threats The most common sources of new competitors are: • Companies competing in a related product/market • Companies using related technologies • Companies already targeting the target prime market segment but with unrelated products • Companies from other geographical areas and with similar products • New start-up companies organized by former employees and/or managers of existing companies The entrance of new competitors is likely when: • There are high profit margins in the industry • There is unmet demand (insufficient supply) in the industry • There are no major barriers to entry • There is future growth potential • Competitive rivalry is not intense • Gaining a competitive advantage over existing firms is feasible • Dissatisfaction with the existing suppliers
  12. Competitive blind-spot What is competitive blind spot and its effects • Much competitive information is bounded by the assumptions that managers’ have with respect to their industry and these assumptions may lead to blind spots. • The effect of such blind spots may cause the strategist to not recognize the significance of events, interpret them inappropriately, or see them only slowly. • • The industry or company main be over rated or under rate thus such mistakes may affect the strategies put in place
  13. Examples of competitive blind-spot Misjudging Industry Boundaries. • Too often firms define their industry around their current • products, customer groups, and geographies blinding themselves to adjacent competitors which subsequently enter their current space. Poor Identification of Competitors. • Strategists frequently focus on only the largest and most • well-known companies to the exclusion of other viable competitors – those potential competitors noted earlier in this chapter. Overemphasis on Competitors’ Visible Competence. • Competitor analysis often focuses on competitors’ hard assets and technology skills and ignore equally potent capabilities such as logistics, product design, or human resources. Emphasis on Where, Not How to Compete. • Strategists too often assume that competitors’ strategies will shift only incrementally to the exclusion of radical repositioning in how they could compete.
  14. Competitive blind-spot continuation Faulty Assumptions about Competitors. • Prisoners of assumptions about competitors – the overuse of stereotypes – cause strategists to misjudge competitors’ competences and competitive advantages. Paralysis by Analysis • Obsession with the task of data collection results in information overload to the detriment of analysis and insight.
  15. Summary of competitive analysis mackinsey 7’s model Definition • The McKinsey 7s model is a tool that analyses firm’s organizational design by looking at 7 key internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to identify if they are effectively aligned and allow organization to achieve its objectives.
  16. Strategy • It is a plan developed by a firm to achieve sustained competitive advantage and successfully compete in the market. For example, short-term strategy is usually a poor choice for a company but if its aligned with other 6 elements, then it may provide strong results. Structure • It represents the way business divisions and units are organized and includes the information of who is accountable to whom. In other words, structure is the organizational chart of the firm. It is also one of the most visible and easy to change elements of the framework. Systems • They are the processes and procedures of the company, which reveal business’ daily activities and how decisions are made. Systems are the area of the firm that determines how business is done and it should be the main focus for managers during organizational change.
  17. Skills • These are the abilities that firm’s employees perform very well. They also include capabilities and competences. During organizational change, the question often arises of what skills the company will really need to reinforce its new strategy or new structure. Staff • The element concerned with what type and how many employees an organization will need and how they will be recruited, trained, motivated and rewarded. Style • It represents the way the company is managed by top-level managers, how they interact, what actions do they take and their symbolic value. In other words, it is the management style of company’s leaders. Shared Values • They are at the core of McKinsey 7s model. They are the norms and standards that guide employee behavior and company actions and thus, are the foundation of every organization.