#CFA: Understanding competitive analysis

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To Understand competitive analysis …

To Understand competitive analysis

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  • 1. COMPETETITIVE ANALYSIS ‐ By Nazia Zaidi © EduPristine – www.edupristine.com
  • 2. What is Competitive Analysis? • Competitive analysis, as the name implies, is an exploration of the companies in a given industry sector or market  niche that are competing with your company’s products or services for market share. • Competitor analysis is an essential component of corporate strategy and an important strategic management tool  that helps a company to distinguish itself from other players in the market. © EduPristine | (Confidential) 2
  • 3. Uses of competitive analysis      Understand strength/weaknesses Provides strategic inputs  Identify gaps in the market  Assists you to price your goods and services Ideas for new technology and methodology © EduPristine | (Confidential) 3
  • 4. Types of competitive analysis • Industry Level – The first step in competitive analysis is to analyse the level of competition in the industry globally. HHI index (Herfindahl‐Hirschman Index) is a commonly accepted measure of global industry competition. The HHI number can range from close to zero to 10,000. Lower HHI indicates higher competition. • Company Level ‐ Company level competition can be assessed by conducting a SWOT analysis for closest competitors • Competitor Mapping‐Graphic tool for understanding competition and finding gaps in the market © EduPristine | (Confidential) 4
  • 5. Components of competitive analysis Strategy Marketing Background Key  Components Pricing Financial Products © EduPristine | (Confidential) 5
  • 6. Industry Competition‐ Porter Analysis Threat of  new  Entrants Bargaining  Power of  Suppliers Bargaining  Power of  Buyers Rivalry Among Existing  Competitors Threat of  Substitutes © EduPristine | (Confidential) 6
  • 7. SWOT Analysis INTERNAL FACTORS S W Largest market share High advertising budget Locally adaptable Global brand Product diversification Small customer base Lack  of revenue streams High employee turnover High operating costs O T International expansion Product expansion Mergers/alliances Cross‐selling Intense competition Political issues Economic uncertainty EXTERNAL FACTORS © EduPristine | (Confidential) 7
  • 8. SWOT Analysis‐ Uses A SWOT analysis can offer helpful perspectives at any stage of an effort. You might use it to:      New efforts or solutions to problems  Identifying your opportunities for success in context of threats  Determine where change is possible Adjust and refine strategic plans mid‐course © EduPristine | (Confidential) 8
  • 9. Competitor Mapping Competitor Mapping is graphic presentation of an organisation competitors. An organisation maps its competitors on  various attributes such as product, pricing, market positioning etc. It helps the decision to easily understand the  positioning of their organisation compared with competitors and capture gaps in the market  Examples © EduPristine | (Confidential) 9
  • 10. Data Sources • Company Websites • Finance Websites • Bridge Websites Researchlinks-http://companyresearchlinks.blogspot.ae/ • • • • Industry Stats Journal Links Industry Financials Reports © EduPristine | (Confidential) New Products M&A Industry Associations • • • • Profile Financials Stock Chart Key developments 10 Management Ratio Analysis Industry Comparables
  • 11. Thank You ! Visit Us On: http://www.edupristine.com/ca Contacts Us: help@edupristine.com support@edupristine.com Follow Us On: http://www.facebook.com/edupristine Subscribe To: http://www.youtube.com/user/edupristine © EduPristine – www.edupristine.com