Future Topics In Industry and Competitive Analysis Industry and Competitive Analysis Chapter 4 Strategy Management

1. CHAPTER:4
FURTHER TOPICS IN INDUSTRY & COMPETITIVE ANALYSIS
Group Presentation : Team Brainiacs
Aditya Jhunjhunwala
Aditya Kumar
Priyanka Kumari
Priyanka Roy
Poulami Ghosh

2. CONTENTS
 Extending the five forces framework
 Game theory
 Competitor Analysis
 Segmentation
 Strategic groups

3. EXTENDING THE FIVE FORCES FRAMEWORK

4. HYPERCOMPETITION
• The porter five forces model based upon the assumption that industry structure determines competitive
behavior, which in turn determines Industry profitability.
• From Joseph’s point of view competition as a perennial gale of creative destruction.
• Schumpeter viewed that competition is a dynamic process in which industry structure is constantly changing
raises the issue of whether competitive behavior should be seen as an outcome of industry structure or a
determinant of industry structure.
• The general feature of industries in today’s world is hypercompetition.
• It is intense and rapid competitive moves, in which competitors must move quickly to build advantages and
erode the advantage of their rival.

5. THE CONTRIBUTION OF GAME THEORY
• Game theory is the study of human conflict and cooperation within a competitive situation which
allows us to model the competitive interaction by relegating competition to a mediating variable that
links industry structure with profitability.
• It offers two specially valuable contribution to strategic management:
1. It permit framing of strategic decision.
2. It can predict the outcome of competitive situation and identity optimal strategic choices.

6. 5 ASPECTS OF STRATEGIC BEHAVIOR FOR FIRM’S
IMPROVEMENT
 Cooperation
 Deterrence
 Commitment
 Changing the structure of the game being played
 Signaling

7. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE
Competitor Analysis : - Identifying the competitors and evaluating their strategies
to determine their strengths and weaknesses relating to those of their own product or
service .
Steps in Analyzing competitor
.
Identifying
the
company’s
competitor .
Assessing
competitors
objective,
strategies,
strengths and
weaknesses and
reaction
patterns.
.
Selecting
which
competitors
to attack or
avoid

8. COMPETITOR ANALYSIS AND COMPETITIVE
INTELLIGENCE
• Competitive Intelligence :- Competitive intelligence involves the systematic
collection and analysis of information about rivals for informing decision making.
Competitive Intelligence has three main purpose
•
To forecast
competitors’ future
strategies and
decisions.
To predict
competitors’ likely
reactions to a firm’s
strategic initiatives
To determine how
competitors’
behavior can be
influenced to make
it more favorable.

9. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE
• A Framework for predicting competitor behavior :- Competitive
intelligence is not simply about collecting information. The problem is likely to be
too much rather than too little information. The key is the systematic approach that
makes it clear what information is required and for what purpose it will be used.
Michael porter proposes a four part framework for predicting competitor behavior
•
Competitor’s current strategy
Competitor’s Objective
Competitor’s assumption about the industry
Competitor’s resources and capabilities

10. COMPETITOR ANALYSIS AND COMPETITIVE INTELLIGENCE
A framework for competitor analysis
STRATEGY
How is the firm competing?
• OBJECTIVE
• What are competitor’s current goals?
• Is performance meeting these goals?
• How are its goal likely to change?
ASSUMPTIONS
What assumptions does the competitor hold about the industry and
itself?
• RESOURCES AND CAPABILITIES
• What are the competitor’s key strengths and weaknesses?
PREDICTIONS
What strategy changes will
the competitor initiate?
How will the competitor
respond to our strategic
initiatives?

11. SEGMENTATION ANALYSIS : THE PRINCIPAL STAGES
• Identify key segmentation variables.
• Construct a segmentation matrix
• Analyze segment attractiveness.
• Identify the segment ‘s key success factors.
• Select segment scope:
 Potential for economics of scope across segments.
 Similarity of KSFs
 product differentiation benefits of segment focus.
SEGMENTATION
Segmentation refers to a process of dividing a large unit into various small units which have more or less similar
or related characteristics.

13. STRATEGIC GROUPS
A strategic group is a group of firms in an industry that follow the same or similar
strategies .
Identifying the strategic groups
 Identify the principal strategic variables which distinguish firms.
 Position each firms in relation to these variables
 Identify Clusters.

14. CONCLUSION
 The importance of competitive interactions between close rivals and learned an approach to
analyze competitors and predicting their future behavior.
 The potential for complementary product to add value and the importance of strategies that can
exploit the source of value.
 Segmentation analysis and strategic group analysis helps us in selecting an advantageous strategic
position within an industry.