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- 1. Unit 4 – Competitor Analysisand Strategies Alex
- 2. Syllabus Competitor Analysis andStrategies Purposes of competitor analysis; competitor response profile; Michael Porter’s analysis of competitive structure of industry; generic competitive strategies; blue ocean strategy.
- 3. Introduction - competitors •Using organizational capability and core competencies as a part of strategic planning • Create sustainable competitive advantage and value • Overtake competitors and develop competitive strategies • Understanding various competitive strategies
- 4. 18- 4 Definition • CompetitiveAdvantage – An advantage over competitors gained by offering consumers greater value than competitors offer.
- 5. 18- 5 Definition • CompetitiveAnalysis – The process of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.
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- 7. 18- 7 Competitor Analysis •Firms face a wide range of competition • Be careful to avoid “competitor myopia” • Methods of identifying competitors: – Industry point-of-view – Market point-of-view • Competitor maps can help Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid Steps in the Process:
- 8. Competitive dimensions • Cost •Quality • Delivery speed • Delivery reliability • Flexibility • New product speed • After sale • Colour, size, weight
- 9. Purpose of competitoranalysis • To identify the competitors • To understand the current strategies of competitor • Future goals and future strategies • Understand the force behind the competitor • Understand the weaknesses and vulnerabilities of the competitors • To develop different response strategies
- 10. Intro : MichealE Porter’s structural analysis of industries Book : Competitive Strategy, Competitive Advantage and Competitive Advantage of Nations • Provides structural analysis of industries • State of competition • 5 basic competitive forces • Four diagnostic components • Competitor Response profile
- 11. Structural analysis ofindustries • Rivalry among existing firms • Threat of new entrants • Threat of substitutes • Bargaining power of suppliers • Bargaining power of buyers
- 12. Structural analysis andcompetitive strategy • Positioning of firms and providing defence • Improving the positioning • Exploiting change
- 13. Strategic groups • Groupsof firms in an industry following the same or similar strategy along the strategic dimensions • Direct competitors are the firms in the strategic group • Competition intensity vary from group to group • High mobility barriers • Mobility barriers can change
- 14. Four diagnostic components– Porter’s framework for competitor analysis • Future goals • Current strategy • Assumptions • Capability
- 15. Competitor Response profile •Based on analysis of the 4 diagnostic components • Firms can prepare a competitor response profile • This shows how a competitor will respond or what actions will the competitor will take when it is provoked • This provides predictions into the tactics and strategies of competitors
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- 17. Strategic Positioning • Genericcompetitor strategies lead to strategic positioning • The essence of strategies is choosing to perform the activities differently or choosing different activities • Positioning its self based on the activities in the minds of the customers • Unique positioning leads to competitive advantage • To make it sustainable competitive advantage there are two conditions i. Trade off ii. Fit
- 18. Four routes ofstrategic advantages • Strategy based on KFS • Strategy based on relative superiority • Strategy based on aggressive initiative • Strategy based on SDF
- 19. The Book andthe Authors Prof Renee Mauborgne © JOHN ABBOTT Prof Chan Kim © JOHN ABBOTT
- 20. New Market Space •Red oceans and blue oceans make up market universe • Red oceans: all industries in existence = known market space • Blue oceans: all industries not in existence = unknown market space
- 21. Red Oceans vs.Blue Oceans • Red oceans – Industry boundaries defined and accepted – Competitive rules of game known – Companies try to outperform rivals; cutthroat competition – As market space gets crowded, prospects for profit and growth reduced – Red ocean strategy is a market-competing strategy • Blue oceans – Undefined market space, demand creation, opportunity for highly profitable growth – Most are created from within red oceans by expanding existing industry boundaries – Rules of game waiting to be set – Competition irrelevant – Blue ocean strategy is a market-creating strategy
- 22. The Rising Imperativeof Creating Blue Oceans • Supply is exceeding demand in most industries • Global competition is intensifying • Problems: – Increasing price wars – Shrinking profit margins • Red oceans becoming bloodier, need to be concerned with creating blue oceans
- 23. Formulating and Executing BlueOcean Strategy • Six Principles of Blue Ocean Strategy – Reconstruct market boundaries – Focus on the big picture, not the numbers – Reach beyond existing demand – Get the strategic sequence right – Overcome key organizational hurdles – Build execution into strategy
- 24. Take Aways • Redocean strategy is a market-competing strategy, while blue ocean strategy is a market-creating strategy • As red oceans are becoming bloodier, we need to create more blue oceans • “The only way to beat the competition is to stop trying to beat the competition!”
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