Watch this with a 10-15 minute audiotrack at http://vimeo.com/novusprogram/lesson18 The goal of this lesson is to provide tools to determine the strengths and weaknesses of potential competitors in order to compete in various markets. The lesson begins with an overview of the importance of competitor analysis and its primary importance. A framework to analyze various competitors is then introduced. The lesson then uses the framework to analyze the key aspects of a competitor. The Novus project is a combination of video tutorials designed to be used in conjunction with a free business simulation software program. The Novus Business and IT Program contains 36 business and IT training videos, covering basic finance, accounting, marketing, economics, business strategy, Word, Excel, and PowerPoint. Users will have an opportunity to apply the lessons in the Novus Business Simulator. Over six rounds, the user or teams will have to make decisions on capital purchases, financing, production, financing, and human resources for a microbrewery. This channel has arranged the 36 video lessons into the order in which they are meant to be used with the simulator. To watch this slideshow as a video, please go to our Vimeo page at: https://vimeo.com/novusprogram. To download our free business simulation software, please go to our SourceForge page at: http://sourceforge.net/projects/novus/.

1. Competitor Analysis
Objective: To provide tools to determine the strengths and weaknesses of
potential competitors in order to contend competitively in various markets.
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2. Competitor Analysis
• Always competitors!
• Purpose:
– Identify top competition
– Determine strengths/weaknesses of competition
– Develop strategies based on analysis to increase
success
• Analyze successful and unsuccessful competitors
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3. Who is a Competitor?
• Companies with a product/service addressing
similar needs
• Products/services considered to be close
substitutes
• Don’t define too narrowly
• Analyzing broader competitors allows for
innovation maximization
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4. Gathering Competitor Information
• Profile of Competitor’s: • Formal & Informal
– Background Documentation
– Finances – Observation of competitors’
– Products products and services
– Conversations with suppliers
– Conversations with customers
– Basic company information (i.e.
public information from
government data)
– Billboards, magazine ads, or other
types of marketing/advertising
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5. Analyzing Customer Information
• With which businesses you should actually
compete
• What new things competitors will try to do
• How competitors react to other businesses’
actions
• How to use the competitor’s behavior to your
advantage
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6. Competitive Analysis Framework
• Michael Porter’s 4
component competitive
matrix answers:
– What drives the competitor?
– What is the competitor capable
of doing?
• Objectives
• Assumptions
• Strategy
• Capabilities
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7. Competitor’s Objectives & Assumptions
Objectives Assumptions
• Growth rate • Past experience with a
• Market share product
• Technology • Industry Trends
• Finance • Future beliefs about a
• Organizational Structure competitor, or
• Regional Factors
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8. Competitor’s Strategies, Capabilities &
Resources
Strategies Capabilities & Resources
• What is the competitor currently • What is the competitor
doing? capable of ?
– Number of workers • What is it not capable of ?
– Current products and services
• Refer to SWOT analysis
– Physical changes in a company’s
office • Reveals how companies CAN
– Location of company act
– Type of customers
– Type and name of supplier
– New construction or remodeling
– Advertising or marketing campaigns
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9. Incorporating Competitor Analysis &
Market Analysis
• What do you see as your
competitor’s strategy?
• Are there any opportunities
you see to take advantage of ?
• Are there any considerations
which you should be taking?
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10. Applying the Competitive Analysis
Matrix
• Strategy • Comparing business to
• Objectives industry standards
– Quality
• Assumptions
– Time
• Resources & Capabilities
– Cost
+
• SWOT
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11. Activity
• As a café owner, you are interested in completing
a competitor analysis for the main competitors
in your town. With the information you learned
in today’s lesson, try to answer the following
questions in PAIRS:
• What are at least 3 ways you can gather data about your
competitors?
• What are 2 external factors which may affect your competitors?
• What are at least 5 benchmarks that you compare yourself versus
your industry competitors?
• What are 3 ways you could look at decreasing your costs?
• If you find your competitors are beginning to cater to a more
business, upscale customer what opportunities do you see for
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your customer base?