The document outlines the objectives and methods for conducting a competitor analysis in order to understand strengths and weaknesses in various markets. It highlights the importance of gathering comprehensive information about competitors and analyzing customer behavior to develop effective strategies. Additionally, it introduces Michael Porter's competitive matrix as a framework for assessing competitor capabilities and formulating responses to market dynamics.

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?