SlideShare a Scribd company logo
1 of 82
Download to read offline
Competitor analysis

At the end of this module the learning outcomes
  are:
   - Importance of understanding competition
   - Approaches to competitor analysis
   - Identifying competitors likely response




                                                  1
Competitor analysis

Suggested Readings

• Strategic Marketing Management by Wilson &
  Gilligan (chapter 4)
• Strategic Marketing by: David Cravens (chapter 7)




                                                  2
Competitor analysis

Who are the competitors of
• Brooke Bond Red Label Tea
• Samsung fax machine
• Titan Watch
• Rajdhani express



                              3
Competitor analysis
Think again
• Have the sales of Samsung fax machines
  gone down because of e-mail?
• Who is your competitor?




                                           4
Competitor analysis

Are they
• Water
• E-mail
• Arrow shirt
• Spice Jet



                              5
Competitor analysis

Harley Davidson perception of competition
• Last American motorcycle
• Symbol of freedom and adventure
• Technically antiquated
• Not seen as form of transport
• Social statements
• Compete against various recreations
                                            6
Competitor analysis

ASIAN PAINTS
• Indian paint industry
• Highly concentrated
• Top four players
• 95% of the market share
• Asian Paints
• Market leader
                              7
Competitor analysis

ASIAN PAINTS
• Next player has less than half market share
• How it has maintained
• Strong value proposition
• Higher customer perceived benefits
• Lower costs

                                                8
Competitor analysis

ASIAN PAINTS
Higher customer perceived benefits
• Initial foray in semi-urban and rural market
• Required extensive distribution network
• Bypasses wholesaler arrangement
• Appointed retailers in semi-urban areas all
  over India
                                             9
Competitor analysis

ASIAN PAINTS
Higher customer perceived benefits
•   Rural areas
•   Smaller size paint products
•   Risk of inventory build up
•   Invested in IT to ensure strict inventory control
•   Networking of offices and depots

                                                        10
Competitor analysis

Higher customer perceived benefits
• Urban areas
• Paints for every price points
• Competitively priced thus encouraging
  economies of scale
• Launch of premium paints
• Launch of color world tinting system
• Customers mix shade before buying       11
Competitor analysis

Higher customer perceived benefits
• Entry into painting solutions
• Dominated by unorganized sector
• Offer solutions
• Higher margins in services



                                     12
Competitor analysis

Lower costs
• Color world tinting
• Means lower stocks
• Reducing inventory and working capital
• Tight control on receivables
• Inventory in number of days and
  receivables lower than industry average
                                            13
Competitor analysis

These initiatives have helped Asian Paints
 to maintain its competitive advantage
 and distinct edge over competitors




                                             14
Competitor analysis

Importance
- Provides an understanding of your competitive
  advantage / disadvantage relative to your
  competitor’s position.
- Insights into competitors strategies
- Developing future strategies to sustain/establish
  advantages over your competitors.


                                                      15
Competitor analysis

Seeking competitive advantage
Two types of analysis
• Industry analysis
• Comparative analysis




                                16
Competitor analysis

Industry analysis
• Every industry
• Peculiar characteristics
• Porter’s five-force model




                              17
Competitor analysis

Porter's approach to competitive structure
analysis
  Nature and intensity of competition within any
  industry is determined by the interaction of five key
  forces:
      1. The threat of new entrants
      2. Power of buyers
      3. Threat of substitutes
      4. Extent of competitive rivalry                18

      5. Power of suppliers
Competitor analysis
1. Threat of new entrants
   - Depends on barriers to entry
   - How heavy is the capital investment
         Intel's huge investment into research
   - Strong brand image to overcome
        Coke investments required to build brands
   - Cost incurred to create distribution channels
        Hindustan Lever’s huge investments
        in distribution in rural areas

                                                 19
Competitor analysis
2. Power of buyers
   - Is likely to be higher if:
      1. There are large number of suppliers
      2. Alternative sources of supply
      3. Threat of backward integration
Example
Reliance Industries
      1. Started as textiles company
      2. Makes raw materials to produce textiles
      3. Vertically integrated
      4. Bargains on price for huge quantities it picks20up.
Competitor analysis
3. Threat of substitutes
   - Will be more prevalent if:
         - Customers perceive other offers to perform
            the same function as ours
         - Substitute products offer higher value for
            money
         - Substitute products earn higher profits




                                                   21
Competitor analysis
– Onion versus ready to make paste
         » Dabur Hommade pastes
– Tomato versus tomato puree
– Scooters versus Motorcycles
         » Hero Honda sales at the expense of Bajaj
– Vanaspati versus edible oils




                                                      22
Competitor analysis
4. Extent of competitive rivalry


Intensity of rivalry will be greater if:
   - Competitors are of equal size and are seeking
      dominance
   - High fixed costs provoke price wars to maintain
      capacity. E.g: Airlines industry




                                                   23
Competitor analysis

– New addition of capacity have created excess
  capacity
        Hotel industry
       Automobile industry
– Product homogeneity necessitates activity to
  maintain share.
         » Coke versus Pepsi




                                                 24
Competitor analysis
5.Power of suppliers
Is likely to be higher if:
    - There are few suppliers
    - Cost of switching from one supplier to another is
       high
                E.g: Intel

Suppliers are likely to integrate forward
      Kirloskar compressors into airconditioners.
      Reliance entry into petroleum products retailing
                                                     25
Competitor analysis

Comparative analysis
• Specific advantage of competitors within a
  given market
Two types
• Structural advantage
• Responsive advantage


                                               26
Competitor analysis

Structural advantage
• Built into business
• A manufacturing plant at Chennai for
  Hyundai to carry out exports




                                         27
Competitor analysis

Responsive advantage
• Position of comparative advantage that have
  accrued to business over time
• Leveraging strategic phenomena at work in
  the business
• Either cost or unique value
• Indigo over Air India
                                            28
Competitor analysis
Intensity and Degree of competition
Factors
• Opportunity potential
• Ease of entry
• Nature of product
• Exit barriers
• Homogeneity of market
                                      29
Competitor analysis

Intensity and Degree of competition
Factors
•   Industry structure or competitive position of firms
•   Commitment to the industry
•   Feasibility of technological innovations
•   Scale economies
•   Economic climate
•   Diversity of firms
                                                      30
Competitor analysis

Opportunity potential
• Promising industry attracts rivals
• Telecom service operators




                                       31
Competitor analysis

Ease of entry
• Easy entry
• Attracts marginal players
• Committed players discourage potential
  entrants
• Colgate trying to thwart Anchor with
  Brands
                                           32
Competitor analysis

Nature of product
• Offerings perceived to be similar
• Tends to go on price
• Severe competition




                                      33
Competitor analysis

Exit barriers
• Regulated
• Exit difficult
Mobile services




                              34
Competitor analysis

Homogeneity of market
• Intensity is higher than segmented
Telecom services versus Telecom handset
  players




                                          35
Competitor analysis

Industry structure or competitive position
  of firms
• Large number of firms
• Intensity higher
• Aggression leads to retaliation
• Fewer players leads to less retaliation


                                             36
Competitor analysis

Commitment to the industry
• Contribution to overall sales
• Maintain position at any cost
Wipro versus Infosys




                                  37
Competitor analysis

Feasibility of technological innovations
• Frequent innovations
• Do their best in short time
• Intensity is higher




                                           38
Competitor analysis

Scale economies
• Economies of scale benefits are high
• Will do everything to get volume
• Aggressive competition for market share
• Escalates pressure
Airlines industry

                                            39
Competitor analysis

Economic climate
• Boom times
• Relatively moderate
• Recession
• Companies bite each other
• Intensity is higher

                              40
Competitor analysis

Diversity of firms
• Old players in the industry
• Display a predictable behavior
• New participants
• Can do many unconventional behavior to
  upset existing players
Dell’s model
                                           41
Competitor analysis

Marketing Myopia
• Theodore Levitt
• Marketing Guru
• How business is defined
• Why American rail business a massive
  decline
• Onslaught of airlines
                                         42
Competitor analysis

THE COURIER MARKET
• came in 70s
• Launch of fax
• Later email
• How players handled competition



                                    43
Competitor analysis

Two approaches

• Adopt new products
• Strengthen existing business




                                 44
Competitor analysis

Adopt new products
IBM
• Hardware in 70s
• Threat from low-cost producers
• Shifted focus to software



                                   45
Competitor analysis

Strength existing business
FED EX
• Earlier couriers
• Competition from fax, email
• Shifted focus on parcel market
• Physical distribution required
• Offered door-to-door delivery
                                   46
Competitor analysis

FED EX
• Offer complete logistics solutions
• Found existing players not offering these
  solutions
• Gradually left the space for document
  courier to smaller companies


                                              47
Competitor analysis

MOSQUITO REPELLANT DEVICES
BALSARA
• Launched ODOMOS in 1964
• Unattended need
• Cream based product
• Inhouse R & D
• Earlier smoke sensing devices were used
                                            48
Competitor analysis
MOSQUITO REPELLANT DEVICES
• Now creams
• Held 97% share of the cream market
• What are the concerns
• Later Tortoise was launched
• Used ‘smoke’ concept
• Economical
• Gained 70% market share
• Odomos 20% share
                                       49
Competitor analysis
MOSQUITO REPELLANT DEVICES
• 1984
• Goodknight brand
• No use of cream or coil
• Value proposition
 – Cleaner
 – Less messy
 – Convenient
                              50
Competitor analysis

MOSQUITO REPELLANT DEVICES
By late 90s
• Mats/liquid-70%
• Coils-22%
• Creams-9%
• Balsara tried to launch mats/liquid
BALSARA lost the market which it created
in 1964
                                           51
Competitor analysis
Poor understanding of the competition
• Decline
  – Air coolers
  – Mopeds
  – Soya-based drinks




                                        52
Competitor analysis
Competition happens at four levels

1.Companies offering only similar products
   - Kitkat versus Perk
   - Nescafe versus Bru




                                             53
Competitor analysis

Competition happens at four levels
2 Companies consisting of all companies operating
  in the same category
  - Cadbury's Eclairs versus. Nestle Kitkat
  - Canada Dry versus Pepsi Cola




                                                54
Competitor analysis
Competition at four levels

3. Competitor consists of all companies manufacturing
   or supplying products which deliver the same service
   - Airlines versus Railways
   - Second hand cars versus scooters versus Tata Nano




                                                   55
Competitor analysis

Competition happens at four levels
4. Competition consists of all companies competing
   for the same spending power
   - Dishwasher versus Microwave oven
   - Designer jewelry versus Ritu Beri's fabrics
   - Debeer’s versus Nokia mobile phones



                                                 56
Competitor analysis
COMPETITIVE EQUILIBRIUM
Five scenarios
If competitors are nearly identical and make their
    living in the same way, then the competitive
    equilibrium is unstable.
• Identical products
• Commodity industries
• Competitive equilibrium gets upset if one cuts
    prices
                                                57
Competitor analysis
If a single major factor is the critical factor, then
    competitive equilibrium is unstable
• Differentiation is possible
• Breakthrough in technologies
• Cut costs
• Change habits of consumers
• Apple’s Iphone
• Amazon.com
                                                        58
Competitor analysis
• If multiple factors may be critical factors, then
  it is possible for each competitor to have some
  advantage and be differentially attractive to
  some customers. The more the multiple factors
  that may provide an advantage, the more the
  number of competitors who can coexist. Each
  competitor has his competitive segment defined
  by the preference for the factor trade-offs that
  he offers.
• Retailing industry in India
                                                  59
Competitor analysis
• The fewer the number of competitive
  variables that are critical, the fewer the
  number of competitors.

• If one factor is critical, fewer competitors.
• More variables, larger number of
  competitors, but smaller in size.
                                                  60
Competitor analysis
• Is it always prudent to increase your market
  share?




                                             61
Competitor analysis
• A ratio of 2 in 1 in market share between
  two competitors seems to be the
  equilibrium point at which it is neither
  practical nor advantageous for other
  competitor to increase or decrease share.




                                          62
Competitor analysis

Marketing Myopia
• Traditional way of looking competition
• Narrow definition
• Identify direct and indirect competition
Competitor analysis

Red-Ocean thinking
• Seeking bloody
• Head-to-head battles with competitor
• Based on improvements in costs, quality or
  both
Competitor analysis

Blue-Ocean thinking
• Creating products and services
• There are no direct competitors
• Go beyond conventional boundaries
• Find unoccupied competitions
• Represent real value innovation
Competitor analysis

Blue-Ocean thinking
EASYJET
• Low-cost carrier
• European carrier
• Quite successful
• ‘Fly to Scotland for a pair of jeans.’
• Competitor to full-price carriers like British
  Airways, Lufthansa
• How 3Vs were used?
                                                   66
Competitor analysis

Valued customer-who to serve
• Traditional carriers targeted everyone
• Mainly business travelers
• Travel mostly on company expenses
EasyJet
• Target those customers who pay from their own
  pocket,
• Predominantly entrepreneurs, small business
  owners                                          67
Competitor analysis

EasyJet
• Target those customers who pay from their own
  pocket
• Predominantly entrepreneurs, small business
  owners
• Large segment in Europe
• Were unhappy with offerings of full-price carriers
Two strategic segments identified
                                                   68
Competitor analysis

Valued-proposition-what to offer?
• Major differences between two segments
• Business segment
  –   Demanding
  –   Freebies such as newspaper, meals
  –   Want seamless connections
  –   Less waiting

                                           69
Competitor analysis

•   Small business travel
•   Willing to forgo these services
•   Lower prices
•   EasyJet’s value proposition answers four
    issues



                                               70
Competitor analysis

Which attributes that our industry takes
  for granted should be eliminated?
• Free meals and travel agents to be
  eliminated.
• Sells food on aircraft
• Eliminated travel agents
• Tickets sold on internet
                                           71
Competitor analysis

Which attributes should be reduced to below
  industry standards?
• Have the offering been overdesigned?
• What can be reduced
• Flexibility in flight changes and seat selection
• Non-refundable fares
• Seat on first-come, first-served basis
• Incentive for passengers to board earlier
                                                     72
Competitor analysis

Which attributes should be increased to
  above industry standards?
• Lower prices
• Punctuality
• Younger fleet of aircraft



                                          73
Competitor analysis

Which new attributes should be created
  that the industry has never offered?
• New sources of value creation
• One-way fares refund if the flight is delayed
  beyond four hours



                                              74
Competitor analysis

Value curve
• Compare the value proposition of various
  players in the industry
• Full-price carriers are superior on every
  dimension
• Which attributes are most important to air
  travelers?
• Reach safely
• Low prices a concern
                                               75
Competitor analysis
Easy Jet
• Streamlined operations
• Fast turnaround
• Greater utilization
• single type of aircraft (Boeing 737)
• Reduces spare parts inventory
• Increases bargaining power with vendors
• Lower pilot training costs
• Elimination of business class means more seats can be
  accommodated

                                                      76
Competitor analysis

FIVE PRINCIPLES OF EASYJET VALUE
   NETWORK
1. Avoid fixed costs wherever possible
      No secretarial staff
1. Cover fixed costs quickly
      Aircrafts remain in air for 11 hours
1. Eliminate variable costs wherever possible
      Avoid use of travel agents
1. Keep variable costs low
      Avoid landing at major ports
1. Convert fixed costs into revenue generators
      Sell food items in aircraft
                                                 77
Customer and Competitor
           Orientations
Competitor-Centered Companies
Example
• Competitor launching a new product next
  brand of soap in Delhi region
• Float a scheme for retailers for our existing
  soap
Customer and Competitor
         Orientations
Competitor-Centered Companies
Advantages
• Organization develops a fighter orientation
• Trained to be on constant alert
Disadvantages
• Too reactive
• Too much dependent on competitor moves
Customer and Competitor
         Orientations
 Customer-Centered Companies
• Focus on customer developments
• The market of children is getting saturated
• Let us reposition the product to widen the
  market to include youth.
Customer and Competitor
         Orientations
Customer-Centered Companies
Advantages
• Better position to identify new opportunities
• Choose a course which delivers long-term
  growth and profits
• Monitoring customer needs
• Amazon.com
Customer and Competitor
         Orientations
Customer-Centered Companies
Disadvantages
• Counter attack by competitors
• Odomos by Good Knight mosquito
  repellant
• Good Knight became the leader

More Related Content

What's hot

How competitive forces shape strategy sec a group 4 (1)
How competitive forces shape  strategy sec a group 4 (1)How competitive forces shape  strategy sec a group 4 (1)
How competitive forces shape strategy sec a group 4 (1)Prateek Singh
 
Bpsm bargaining power of buyers
Bpsm bargaining power of buyersBpsm bargaining power of buyers
Bpsm bargaining power of buyersAman Sud
 
Porters Five Forces 2003
Porters Five Forces 2003Porters Five Forces 2003
Porters Five Forces 2003zee.q
 
Michael Porter's 5 forces model
Michael Porter's 5 forces modelMichael Porter's 5 forces model
Michael Porter's 5 forces modelMC Tubera
 
Ppt competitive advantage
Ppt competitive advantagePpt competitive advantage
Ppt competitive advantagezhouguoqing
 
Michel Porter's five forces model
Michel Porter's five forces modelMichel Porter's five forces model
Michel Porter's five forces modelDebasis Behera
 
6 m porter's 5 forces competitive model
6 m porter's 5 forces competitive model6 m porter's 5 forces competitive model
6 m porter's 5 forces competitive modelbwire sedrick
 
5 forces of model Michael proter
5 forces of model  Michael proter5 forces of model  Michael proter
5 forces of model Michael proterVipin Sharma
 
Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...
Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...
Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...Lawrence (Laurie) Phillips
 
How competitive forces shape strategy?
How competitive forces shape strategy?How competitive forces shape strategy?
How competitive forces shape strategy?Ashish Verma
 
Porter five forces analysis
Porter five forces analysisPorter five forces analysis
Porter five forces analysisMasih Nabizadeh
 
Marketing Management - Porter's Five Forces
Marketing Management - Porter's Five ForcesMarketing Management - Porter's Five Forces
Marketing Management - Porter's Five ForcesSarosh Gul
 

What's hot (20)

How competitive forces shape strategy sec a group 4 (1)
How competitive forces shape  strategy sec a group 4 (1)How competitive forces shape  strategy sec a group 4 (1)
How competitive forces shape strategy sec a group 4 (1)
 
Five forces model
Five forces modelFive forces model
Five forces model
 
Porter 5 force analysis
Porter 5 force analysisPorter 5 force analysis
Porter 5 force analysis
 
Bpsm bargaining power of buyers
Bpsm bargaining power of buyersBpsm bargaining power of buyers
Bpsm bargaining power of buyers
 
Porters Five Forces 2003
Porters Five Forces 2003Porters Five Forces 2003
Porters Five Forces 2003
 
Michael Porter's 5 forces model
Michael Porter's 5 forces modelMichael Porter's 5 forces model
Michael Porter's 5 forces model
 
Ppt competitive advantage
Ppt competitive advantagePpt competitive advantage
Ppt competitive advantage
 
Porter 5 Forces
Porter 5 ForcesPorter 5 Forces
Porter 5 Forces
 
Porter's 5 Force Model
Porter's 5 Force ModelPorter's 5 Force Model
Porter's 5 Force Model
 
Porter’s five forces
Porter’s five forcesPorter’s five forces
Porter’s five forces
 
Barney smca4 05
Barney smca4 05Barney smca4 05
Barney smca4 05
 
Porter model
Porter modelPorter model
Porter model
 
Michel Porter's five forces model
Michel Porter's five forces modelMichel Porter's five forces model
Michel Porter's five forces model
 
6 m porter's 5 forces competitive model
6 m porter's 5 forces competitive model6 m porter's 5 forces competitive model
6 m porter's 5 forces competitive model
 
5 forces of model Michael proter
5 forces of model  Michael proter5 forces of model  Michael proter
5 forces of model Michael proter
 
Porter Five Forces Review Assignment
Porter Five Forces Review AssignmentPorter Five Forces Review Assignment
Porter Five Forces Review Assignment
 
Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...
Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...
Strategic Characterisation Matrix - How to apply Porter’s Five Forces thinkin...
 
How competitive forces shape strategy?
How competitive forces shape strategy?How competitive forces shape strategy?
How competitive forces shape strategy?
 
Porter five forces analysis
Porter five forces analysisPorter five forces analysis
Porter five forces analysis
 
Marketing Management - Porter's Five Forces
Marketing Management - Porter's Five ForcesMarketing Management - Porter's Five Forces
Marketing Management - Porter's Five Forces
 

Viewers also liked

Twinkies Brand Engagement Strategy
Twinkies Brand Engagement StrategyTwinkies Brand Engagement Strategy
Twinkies Brand Engagement Strategypjessedonaldson
 
Twinkies Brand Engagement Idea
Twinkies Brand Engagement IdeaTwinkies Brand Engagement Idea
Twinkies Brand Engagement Idearuben_deavila
 
better than gold
better than goldbetter than gold
better than goldlcolasanti
 
SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...
SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...
SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...Distilled
 
Local Market Activation for Big Brands | SearchCon 2016
Local Market Activation for Big Brands | SearchCon 2016Local Market Activation for Big Brands | SearchCon 2016
Local Market Activation for Big Brands | SearchCon 2016Nick Neels
 
Making your Competitions Fun - Iain Haywood - Brighton SEO 2015 Presentation
Making your Competitions Fun - Iain Haywood - Brighton SEO 2015 PresentationMaking your Competitions Fun - Iain Haywood - Brighton SEO 2015 Presentation
Making your Competitions Fun - Iain Haywood - Brighton SEO 2015 PresentationThe Competition Agency
 
Concept of Advertising
Concept of AdvertisingConcept of Advertising
Concept of AdvertisingSunil Chichra
 
Advertising concepts & principles
Advertising concepts & principlesAdvertising concepts & principles
Advertising concepts & principlesmanjushachute
 
Starbucks Strategy
Starbucks StrategyStarbucks Strategy
Starbucks Strategytommy2cruise
 
7 Content Marketing Trends That Matter in 2017
7 Content Marketing Trends That Matter in 20177 Content Marketing Trends That Matter in 2017
7 Content Marketing Trends That Matter in 2017Jay Baer
 
Your Speech is Toxic
Your Speech is ToxicYour Speech is Toxic
Your Speech is ToxicChiara Ojeda
 
presentation of brands
presentation of brandspresentation of brands
presentation of brandsSilence Speed
 
Marketing Management Project.
Marketing Management Project.Marketing Management Project.
Marketing Management Project.roomzkazi
 
State of the Word 2011
State of the Word 2011State of the Word 2011
State of the Word 2011photomatt
 

Viewers also liked (15)

Twinkies Brand Engagement Strategy
Twinkies Brand Engagement StrategyTwinkies Brand Engagement Strategy
Twinkies Brand Engagement Strategy
 
Twinkies Brand Engagement Idea
Twinkies Brand Engagement IdeaTwinkies Brand Engagement Idea
Twinkies Brand Engagement Idea
 
better than gold
better than goldbetter than gold
better than gold
 
SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...
SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...
SearchLove London | Iain Haywood, 'Promotional Marketing: The Good, The Bad, ...
 
Raghu red bull
Raghu red bullRaghu red bull
Raghu red bull
 
Local Market Activation for Big Brands | SearchCon 2016
Local Market Activation for Big Brands | SearchCon 2016Local Market Activation for Big Brands | SearchCon 2016
Local Market Activation for Big Brands | SearchCon 2016
 
Making your Competitions Fun - Iain Haywood - Brighton SEO 2015 Presentation
Making your Competitions Fun - Iain Haywood - Brighton SEO 2015 PresentationMaking your Competitions Fun - Iain Haywood - Brighton SEO 2015 Presentation
Making your Competitions Fun - Iain Haywood - Brighton SEO 2015 Presentation
 
Concept of Advertising
Concept of AdvertisingConcept of Advertising
Concept of Advertising
 
Advertising concepts & principles
Advertising concepts & principlesAdvertising concepts & principles
Advertising concepts & principles
 
Starbucks Strategy
Starbucks StrategyStarbucks Strategy
Starbucks Strategy
 
7 Content Marketing Trends That Matter in 2017
7 Content Marketing Trends That Matter in 20177 Content Marketing Trends That Matter in 2017
7 Content Marketing Trends That Matter in 2017
 
Your Speech is Toxic
Your Speech is ToxicYour Speech is Toxic
Your Speech is Toxic
 
presentation of brands
presentation of brandspresentation of brands
presentation of brands
 
Marketing Management Project.
Marketing Management Project.Marketing Management Project.
Marketing Management Project.
 
State of the Word 2011
State of the Word 2011State of the Word 2011
State of the Word 2011
 

Similar to Analysis of competition_1

© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx
© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx
© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docxsusanschei
 
Marketing Management
Marketing ManagementMarketing Management
Marketing Managementrsinghkaurav
 
Porte's Five Forces Model
Porte's Five Forces ModelPorte's Five Forces Model
Porte's Five Forces ModelMariamKhan120
 
Porter’s Five Forces Model of Competitive Analysis
Porter’s Five Forces Model of Competitive AnalysisPorter’s Five Forces Model of Competitive Analysis
Porter’s Five Forces Model of Competitive AnalysisHitaksha Puthran
 
Strategy and the Internet
Strategy and the InternetStrategy and the Internet
Strategy and the InternetJielin Zhang
 
2nd mod papc
2nd mod papc2nd mod papc
2nd mod papcdonbosco
 
Utsav Mahendra : Generation and screening of project ideas
Utsav Mahendra : Generation and screening of project ideasUtsav Mahendra : Generation and screening of project ideas
Utsav Mahendra : Generation and screening of project ideasUtsav Mahendra
 
mopolistic competition- all you neeed to know
mopolistic competition- all you neeed to knowmopolistic competition- all you neeed to know
mopolistic competition- all you neeed to knowANKUR BAROT
 
Balance Scorecard and Porter's Five Forces
Balance Scorecard and Porter's Five ForcesBalance Scorecard and Porter's Five Forces
Balance Scorecard and Porter's Five Forcesdownloadjalgaon
 
MktRes-MARK4338-Lecture1_001.ppt
MktRes-MARK4338-Lecture1_001.pptMktRes-MARK4338-Lecture1_001.ppt
MktRes-MARK4338-Lecture1_001.pptmubasherakram1
 
Competitive advantage
Competitive advantageCompetitive advantage
Competitive advantageMohit Singla
 
Business Strategy.pptx
Business Strategy.pptxBusiness Strategy.pptx
Business Strategy.pptxmoraci6521
 
Copetetive Environment
Copetetive EnvironmentCopetetive Environment
Copetetive EnvironmentFahim Akhtar
 

Similar to Analysis of competition_1 (20)

© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx
© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx
© Lucas Wenger 2018Welcome to Strategic ManagementWeek 3.docx
 
Marketing Management
Marketing ManagementMarketing Management
Marketing Management
 
Porte's Five Forces Model
Porte's Five Forces ModelPorte's Five Forces Model
Porte's Five Forces Model
 
Porter’s Five Forces Model of Competitive Analysis
Porter’s Five Forces Model of Competitive AnalysisPorter’s Five Forces Model of Competitive Analysis
Porter’s Five Forces Model of Competitive Analysis
 
Strategy and the Internet
Strategy and the InternetStrategy and the Internet
Strategy and the Internet
 
2nd mod papc
2nd mod papc2nd mod papc
2nd mod papc
 
Five force plus one
Five force plus oneFive force plus one
Five force plus one
 
Utsav Mahendra : Generation and screening of project ideas
Utsav Mahendra : Generation and screening of project ideasUtsav Mahendra : Generation and screening of project ideas
Utsav Mahendra : Generation and screening of project ideas
 
mopolistic competition- all you neeed to know
mopolistic competition- all you neeed to knowmopolistic competition- all you neeed to know
mopolistic competition- all you neeed to know
 
Porter's model
Porter's modelPorter's model
Porter's model
 
5 forces
5 forces5 forces
5 forces
 
Balance Scorecard and Porter's Five Forces
Balance Scorecard and Porter's Five ForcesBalance Scorecard and Porter's Five Forces
Balance Scorecard and Porter's Five Forces
 
MktRes-MARK4338-Lecture1_001.ppt
MktRes-MARK4338-Lecture1_001.pptMktRes-MARK4338-Lecture1_001.ppt
MktRes-MARK4338-Lecture1_001.ppt
 
Porter
PorterPorter
Porter
 
strategic mngmnt
strategic mngmntstrategic mngmnt
strategic mngmnt
 
Competitive advantage
Competitive advantageCompetitive advantage
Competitive advantage
 
Business Strategy.pptx
Business Strategy.pptxBusiness Strategy.pptx
Business Strategy.pptx
 
Porter's five forces
Porter's five forcesPorter's five forces
Porter's five forces
 
Copetetive Environment
Copetetive EnvironmentCopetetive Environment
Copetetive Environment
 
Unit 03 final
Unit 03 finalUnit 03 final
Unit 03 final
 

Recently uploaded

Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)
Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)
Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)Lviv Startup Club
 
ISO 37002:2021 (Whistleblowing Management Systems) Awareness Training
ISO 37002:2021 (Whistleblowing Management Systems) Awareness TrainingISO 37002:2021 (Whistleblowing Management Systems) Awareness Training
ISO 37002:2021 (Whistleblowing Management Systems) Awareness TrainingOperational Excellence Consulting
 
Jewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreJewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreNZSG
 
5 Digital Onboarding Trends To Watch In 2024.pdf
5 Digital Onboarding Trends To Watch In 2024.pdf5 Digital Onboarding Trends To Watch In 2024.pdf
5 Digital Onboarding Trends To Watch In 2024.pdfVeri5digital
 
Neha Jhalani Hiranandani: A Guide to Her Life and Career
Neha Jhalani Hiranandani: A Guide to Her Life and CareerNeha Jhalani Hiranandani: A Guide to Her Life and Career
Neha Jhalani Hiranandani: A Guide to Her Life and Careerr98588472
 
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...SOFTTECHHUB
 
Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsKnowledgeSeed
 
Entrepreneurial ecosystem- Wider context
Entrepreneurial ecosystem- Wider contextEntrepreneurial ecosystem- Wider context
Entrepreneurial ecosystem- Wider contextP&CO
 
How the Insurance Industry is Scaling with AI
How the Insurance Industry is  Scaling with AIHow the Insurance Industry is  Scaling with AI
How the Insurance Industry is Scaling with AIPeter Ward
 
Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...
Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...
Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...Aggregage
 
Rakhi sets symbolizing the bond of love.pptx
Rakhi sets symbolizing the bond of love.pptxRakhi sets symbolizing the bond of love.pptx
Rakhi sets symbolizing the bond of love.pptxRakhi Bazaar
 
Welding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan DynamicsWelding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan DynamicsIndiaMART InterMESH Limited
 
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...Hector Del Castillo, CPM, CPMM
 
Fundamentals Welcome and Inclusive DEIB
Fundamentals Welcome and  Inclusive DEIBFundamentals Welcome and  Inclusive DEIB
Fundamentals Welcome and Inclusive DEIBGregory DeShields
 
Pistachio Caviar and raisins from Iran.pdf
Pistachio Caviar and raisins from Iran.pdfPistachio Caviar and raisins from Iran.pdf
Pistachio Caviar and raisins from Iran.pdfRezaSeif2
 
Paul Turovsky - Real Estate Professional
Paul Turovsky - Real Estate ProfessionalPaul Turovsky - Real Estate Professional
Paul Turovsky - Real Estate ProfessionalPaul Turovsky
 
Excvation Safety for safety officers reference
Excvation Safety for safety officers referenceExcvation Safety for safety officers reference
Excvation Safety for safety officers referencessuser2c065e
 
decentralized Launchpad providing a safe and transparent fundraising
decentralized Launchpad providing a safe and transparent fundraisingdecentralized Launchpad providing a safe and transparent fundraising
decentralized Launchpad providing a safe and transparent fundraisingrectinajh
 
Andrii Rodionov: What can go wrong in a distributed system – experience from ...
Andrii Rodionov: What can go wrong in a distributed system – experience from ...Andrii Rodionov: What can go wrong in a distributed system – experience from ...
Andrii Rodionov: What can go wrong in a distributed system – experience from ...Lviv Startup Club
 
1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdf1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdfShaun Heinrichs
 

Recently uploaded (20)

Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)
Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)
Kyryl Truskovskyi: Training and Serving Open-Sourced Foundational Models (UA)
 
ISO 37002:2021 (Whistleblowing Management Systems) Awareness Training
ISO 37002:2021 (Whistleblowing Management Systems) Awareness TrainingISO 37002:2021 (Whistleblowing Management Systems) Awareness Training
ISO 37002:2021 (Whistleblowing Management Systems) Awareness Training
 
Jewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreJewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource Centre
 
5 Digital Onboarding Trends To Watch In 2024.pdf
5 Digital Onboarding Trends To Watch In 2024.pdf5 Digital Onboarding Trends To Watch In 2024.pdf
5 Digital Onboarding Trends To Watch In 2024.pdf
 
Neha Jhalani Hiranandani: A Guide to Her Life and Career
Neha Jhalani Hiranandani: A Guide to Her Life and CareerNeha Jhalani Hiranandani: A Guide to Her Life and Career
Neha Jhalani Hiranandani: A Guide to Her Life and Career
 
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
How To Simplify Your Scheduling with AI Calendarfly The Hassle-Free Online Bo...
 
Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applications
 
Entrepreneurial ecosystem- Wider context
Entrepreneurial ecosystem- Wider contextEntrepreneurial ecosystem- Wider context
Entrepreneurial ecosystem- Wider context
 
How the Insurance Industry is Scaling with AI
How the Insurance Industry is  Scaling with AIHow the Insurance Industry is  Scaling with AI
How the Insurance Industry is Scaling with AI
 
Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...
Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...
Strategic Project Finance Essentials: A Project Manager’s Guide to Financial ...
 
Rakhi sets symbolizing the bond of love.pptx
Rakhi sets symbolizing the bond of love.pptxRakhi sets symbolizing the bond of love.pptx
Rakhi sets symbolizing the bond of love.pptx
 
Welding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan DynamicsWelding Electrode Making Machine By Deccan Dynamics
Welding Electrode Making Machine By Deccan Dynamics
 
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
How Generative AI Is Transforming Your Business | Byond Growth Insights | Apr...
 
Fundamentals Welcome and Inclusive DEIB
Fundamentals Welcome and  Inclusive DEIBFundamentals Welcome and  Inclusive DEIB
Fundamentals Welcome and Inclusive DEIB
 
Pistachio Caviar and raisins from Iran.pdf
Pistachio Caviar and raisins from Iran.pdfPistachio Caviar and raisins from Iran.pdf
Pistachio Caviar and raisins from Iran.pdf
 
Paul Turovsky - Real Estate Professional
Paul Turovsky - Real Estate ProfessionalPaul Turovsky - Real Estate Professional
Paul Turovsky - Real Estate Professional
 
Excvation Safety for safety officers reference
Excvation Safety for safety officers referenceExcvation Safety for safety officers reference
Excvation Safety for safety officers reference
 
decentralized Launchpad providing a safe and transparent fundraising
decentralized Launchpad providing a safe and transparent fundraisingdecentralized Launchpad providing a safe and transparent fundraising
decentralized Launchpad providing a safe and transparent fundraising
 
Andrii Rodionov: What can go wrong in a distributed system – experience from ...
Andrii Rodionov: What can go wrong in a distributed system – experience from ...Andrii Rodionov: What can go wrong in a distributed system – experience from ...
Andrii Rodionov: What can go wrong in a distributed system – experience from ...
 
1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdf1911 Gold Corporate Presentation Apr 2024.pdf
1911 Gold Corporate Presentation Apr 2024.pdf
 

Analysis of competition_1

  • 1. Competitor analysis At the end of this module the learning outcomes are: - Importance of understanding competition - Approaches to competitor analysis - Identifying competitors likely response 1
  • 2. Competitor analysis Suggested Readings • Strategic Marketing Management by Wilson & Gilligan (chapter 4) • Strategic Marketing by: David Cravens (chapter 7) 2
  • 3. Competitor analysis Who are the competitors of • Brooke Bond Red Label Tea • Samsung fax machine • Titan Watch • Rajdhani express 3
  • 4. Competitor analysis Think again • Have the sales of Samsung fax machines gone down because of e-mail? • Who is your competitor? 4
  • 5. Competitor analysis Are they • Water • E-mail • Arrow shirt • Spice Jet 5
  • 6. Competitor analysis Harley Davidson perception of competition • Last American motorcycle • Symbol of freedom and adventure • Technically antiquated • Not seen as form of transport • Social statements • Compete against various recreations 6
  • 7. Competitor analysis ASIAN PAINTS • Indian paint industry • Highly concentrated • Top four players • 95% of the market share • Asian Paints • Market leader 7
  • 8. Competitor analysis ASIAN PAINTS • Next player has less than half market share • How it has maintained • Strong value proposition • Higher customer perceived benefits • Lower costs 8
  • 9. Competitor analysis ASIAN PAINTS Higher customer perceived benefits • Initial foray in semi-urban and rural market • Required extensive distribution network • Bypasses wholesaler arrangement • Appointed retailers in semi-urban areas all over India 9
  • 10. Competitor analysis ASIAN PAINTS Higher customer perceived benefits • Rural areas • Smaller size paint products • Risk of inventory build up • Invested in IT to ensure strict inventory control • Networking of offices and depots 10
  • 11. Competitor analysis Higher customer perceived benefits • Urban areas • Paints for every price points • Competitively priced thus encouraging economies of scale • Launch of premium paints • Launch of color world tinting system • Customers mix shade before buying 11
  • 12. Competitor analysis Higher customer perceived benefits • Entry into painting solutions • Dominated by unorganized sector • Offer solutions • Higher margins in services 12
  • 13. Competitor analysis Lower costs • Color world tinting • Means lower stocks • Reducing inventory and working capital • Tight control on receivables • Inventory in number of days and receivables lower than industry average 13
  • 14. Competitor analysis These initiatives have helped Asian Paints to maintain its competitive advantage and distinct edge over competitors 14
  • 15. Competitor analysis Importance - Provides an understanding of your competitive advantage / disadvantage relative to your competitor’s position. - Insights into competitors strategies - Developing future strategies to sustain/establish advantages over your competitors. 15
  • 16. Competitor analysis Seeking competitive advantage Two types of analysis • Industry analysis • Comparative analysis 16
  • 17. Competitor analysis Industry analysis • Every industry • Peculiar characteristics • Porter’s five-force model 17
  • 18. Competitor analysis Porter's approach to competitive structure analysis Nature and intensity of competition within any industry is determined by the interaction of five key forces: 1. The threat of new entrants 2. Power of buyers 3. Threat of substitutes 4. Extent of competitive rivalry 18 5. Power of suppliers
  • 19. Competitor analysis 1. Threat of new entrants - Depends on barriers to entry - How heavy is the capital investment Intel's huge investment into research - Strong brand image to overcome Coke investments required to build brands - Cost incurred to create distribution channels Hindustan Lever’s huge investments in distribution in rural areas 19
  • 20. Competitor analysis 2. Power of buyers - Is likely to be higher if: 1. There are large number of suppliers 2. Alternative sources of supply 3. Threat of backward integration Example Reliance Industries 1. Started as textiles company 2. Makes raw materials to produce textiles 3. Vertically integrated 4. Bargains on price for huge quantities it picks20up.
  • 21. Competitor analysis 3. Threat of substitutes - Will be more prevalent if: - Customers perceive other offers to perform the same function as ours - Substitute products offer higher value for money - Substitute products earn higher profits 21
  • 22. Competitor analysis – Onion versus ready to make paste » Dabur Hommade pastes – Tomato versus tomato puree – Scooters versus Motorcycles » Hero Honda sales at the expense of Bajaj – Vanaspati versus edible oils 22
  • 23. Competitor analysis 4. Extent of competitive rivalry Intensity of rivalry will be greater if: - Competitors are of equal size and are seeking dominance - High fixed costs provoke price wars to maintain capacity. E.g: Airlines industry 23
  • 24. Competitor analysis – New addition of capacity have created excess capacity Hotel industry Automobile industry – Product homogeneity necessitates activity to maintain share. » Coke versus Pepsi 24
  • 25. Competitor analysis 5.Power of suppliers Is likely to be higher if: - There are few suppliers - Cost of switching from one supplier to another is high E.g: Intel Suppliers are likely to integrate forward Kirloskar compressors into airconditioners. Reliance entry into petroleum products retailing 25
  • 26. Competitor analysis Comparative analysis • Specific advantage of competitors within a given market Two types • Structural advantage • Responsive advantage 26
  • 27. Competitor analysis Structural advantage • Built into business • A manufacturing plant at Chennai for Hyundai to carry out exports 27
  • 28. Competitor analysis Responsive advantage • Position of comparative advantage that have accrued to business over time • Leveraging strategic phenomena at work in the business • Either cost or unique value • Indigo over Air India 28
  • 29. Competitor analysis Intensity and Degree of competition Factors • Opportunity potential • Ease of entry • Nature of product • Exit barriers • Homogeneity of market 29
  • 30. Competitor analysis Intensity and Degree of competition Factors • Industry structure or competitive position of firms • Commitment to the industry • Feasibility of technological innovations • Scale economies • Economic climate • Diversity of firms 30
  • 31. Competitor analysis Opportunity potential • Promising industry attracts rivals • Telecom service operators 31
  • 32. Competitor analysis Ease of entry • Easy entry • Attracts marginal players • Committed players discourage potential entrants • Colgate trying to thwart Anchor with Brands 32
  • 33. Competitor analysis Nature of product • Offerings perceived to be similar • Tends to go on price • Severe competition 33
  • 34. Competitor analysis Exit barriers • Regulated • Exit difficult Mobile services 34
  • 35. Competitor analysis Homogeneity of market • Intensity is higher than segmented Telecom services versus Telecom handset players 35
  • 36. Competitor analysis Industry structure or competitive position of firms • Large number of firms • Intensity higher • Aggression leads to retaliation • Fewer players leads to less retaliation 36
  • 37. Competitor analysis Commitment to the industry • Contribution to overall sales • Maintain position at any cost Wipro versus Infosys 37
  • 38. Competitor analysis Feasibility of technological innovations • Frequent innovations • Do their best in short time • Intensity is higher 38
  • 39. Competitor analysis Scale economies • Economies of scale benefits are high • Will do everything to get volume • Aggressive competition for market share • Escalates pressure Airlines industry 39
  • 40. Competitor analysis Economic climate • Boom times • Relatively moderate • Recession • Companies bite each other • Intensity is higher 40
  • 41. Competitor analysis Diversity of firms • Old players in the industry • Display a predictable behavior • New participants • Can do many unconventional behavior to upset existing players Dell’s model 41
  • 42. Competitor analysis Marketing Myopia • Theodore Levitt • Marketing Guru • How business is defined • Why American rail business a massive decline • Onslaught of airlines 42
  • 43. Competitor analysis THE COURIER MARKET • came in 70s • Launch of fax • Later email • How players handled competition 43
  • 44. Competitor analysis Two approaches • Adopt new products • Strengthen existing business 44
  • 45. Competitor analysis Adopt new products IBM • Hardware in 70s • Threat from low-cost producers • Shifted focus to software 45
  • 46. Competitor analysis Strength existing business FED EX • Earlier couriers • Competition from fax, email • Shifted focus on parcel market • Physical distribution required • Offered door-to-door delivery 46
  • 47. Competitor analysis FED EX • Offer complete logistics solutions • Found existing players not offering these solutions • Gradually left the space for document courier to smaller companies 47
  • 48. Competitor analysis MOSQUITO REPELLANT DEVICES BALSARA • Launched ODOMOS in 1964 • Unattended need • Cream based product • Inhouse R & D • Earlier smoke sensing devices were used 48
  • 49. Competitor analysis MOSQUITO REPELLANT DEVICES • Now creams • Held 97% share of the cream market • What are the concerns • Later Tortoise was launched • Used ‘smoke’ concept • Economical • Gained 70% market share • Odomos 20% share 49
  • 50. Competitor analysis MOSQUITO REPELLANT DEVICES • 1984 • Goodknight brand • No use of cream or coil • Value proposition – Cleaner – Less messy – Convenient 50
  • 51. Competitor analysis MOSQUITO REPELLANT DEVICES By late 90s • Mats/liquid-70% • Coils-22% • Creams-9% • Balsara tried to launch mats/liquid BALSARA lost the market which it created in 1964 51
  • 52. Competitor analysis Poor understanding of the competition • Decline – Air coolers – Mopeds – Soya-based drinks 52
  • 53. Competitor analysis Competition happens at four levels 1.Companies offering only similar products - Kitkat versus Perk - Nescafe versus Bru 53
  • 54. Competitor analysis Competition happens at four levels 2 Companies consisting of all companies operating in the same category - Cadbury's Eclairs versus. Nestle Kitkat - Canada Dry versus Pepsi Cola 54
  • 55. Competitor analysis Competition at four levels 3. Competitor consists of all companies manufacturing or supplying products which deliver the same service - Airlines versus Railways - Second hand cars versus scooters versus Tata Nano 55
  • 56. Competitor analysis Competition happens at four levels 4. Competition consists of all companies competing for the same spending power - Dishwasher versus Microwave oven - Designer jewelry versus Ritu Beri's fabrics - Debeer’s versus Nokia mobile phones 56
  • 57. Competitor analysis COMPETITIVE EQUILIBRIUM Five scenarios If competitors are nearly identical and make their living in the same way, then the competitive equilibrium is unstable. • Identical products • Commodity industries • Competitive equilibrium gets upset if one cuts prices 57
  • 58. Competitor analysis If a single major factor is the critical factor, then competitive equilibrium is unstable • Differentiation is possible • Breakthrough in technologies • Cut costs • Change habits of consumers • Apple’s Iphone • Amazon.com 58
  • 59. Competitor analysis • If multiple factors may be critical factors, then it is possible for each competitor to have some advantage and be differentially attractive to some customers. The more the multiple factors that may provide an advantage, the more the number of competitors who can coexist. Each competitor has his competitive segment defined by the preference for the factor trade-offs that he offers. • Retailing industry in India 59
  • 60. Competitor analysis • The fewer the number of competitive variables that are critical, the fewer the number of competitors. • If one factor is critical, fewer competitors. • More variables, larger number of competitors, but smaller in size. 60
  • 61. Competitor analysis • Is it always prudent to increase your market share? 61
  • 62. Competitor analysis • A ratio of 2 in 1 in market share between two competitors seems to be the equilibrium point at which it is neither practical nor advantageous for other competitor to increase or decrease share. 62
  • 63. Competitor analysis Marketing Myopia • Traditional way of looking competition • Narrow definition • Identify direct and indirect competition
  • 64. Competitor analysis Red-Ocean thinking • Seeking bloody • Head-to-head battles with competitor • Based on improvements in costs, quality or both
  • 65. Competitor analysis Blue-Ocean thinking • Creating products and services • There are no direct competitors • Go beyond conventional boundaries • Find unoccupied competitions • Represent real value innovation
  • 66. Competitor analysis Blue-Ocean thinking EASYJET • Low-cost carrier • European carrier • Quite successful • ‘Fly to Scotland for a pair of jeans.’ • Competitor to full-price carriers like British Airways, Lufthansa • How 3Vs were used? 66
  • 67. Competitor analysis Valued customer-who to serve • Traditional carriers targeted everyone • Mainly business travelers • Travel mostly on company expenses EasyJet • Target those customers who pay from their own pocket, • Predominantly entrepreneurs, small business owners 67
  • 68. Competitor analysis EasyJet • Target those customers who pay from their own pocket • Predominantly entrepreneurs, small business owners • Large segment in Europe • Were unhappy with offerings of full-price carriers Two strategic segments identified 68
  • 69. Competitor analysis Valued-proposition-what to offer? • Major differences between two segments • Business segment – Demanding – Freebies such as newspaper, meals – Want seamless connections – Less waiting 69
  • 70. Competitor analysis • Small business travel • Willing to forgo these services • Lower prices • EasyJet’s value proposition answers four issues 70
  • 71. Competitor analysis Which attributes that our industry takes for granted should be eliminated? • Free meals and travel agents to be eliminated. • Sells food on aircraft • Eliminated travel agents • Tickets sold on internet 71
  • 72. Competitor analysis Which attributes should be reduced to below industry standards? • Have the offering been overdesigned? • What can be reduced • Flexibility in flight changes and seat selection • Non-refundable fares • Seat on first-come, first-served basis • Incentive for passengers to board earlier 72
  • 73. Competitor analysis Which attributes should be increased to above industry standards? • Lower prices • Punctuality • Younger fleet of aircraft 73
  • 74. Competitor analysis Which new attributes should be created that the industry has never offered? • New sources of value creation • One-way fares refund if the flight is delayed beyond four hours 74
  • 75. Competitor analysis Value curve • Compare the value proposition of various players in the industry • Full-price carriers are superior on every dimension • Which attributes are most important to air travelers? • Reach safely • Low prices a concern 75
  • 76. Competitor analysis Easy Jet • Streamlined operations • Fast turnaround • Greater utilization • single type of aircraft (Boeing 737) • Reduces spare parts inventory • Increases bargaining power with vendors • Lower pilot training costs • Elimination of business class means more seats can be accommodated 76
  • 77. Competitor analysis FIVE PRINCIPLES OF EASYJET VALUE NETWORK 1. Avoid fixed costs wherever possible No secretarial staff 1. Cover fixed costs quickly Aircrafts remain in air for 11 hours 1. Eliminate variable costs wherever possible Avoid use of travel agents 1. Keep variable costs low Avoid landing at major ports 1. Convert fixed costs into revenue generators Sell food items in aircraft 77
  • 78. Customer and Competitor Orientations Competitor-Centered Companies Example • Competitor launching a new product next brand of soap in Delhi region • Float a scheme for retailers for our existing soap
  • 79. Customer and Competitor Orientations Competitor-Centered Companies Advantages • Organization develops a fighter orientation • Trained to be on constant alert Disadvantages • Too reactive • Too much dependent on competitor moves
  • 80. Customer and Competitor Orientations Customer-Centered Companies • Focus on customer developments • The market of children is getting saturated • Let us reposition the product to widen the market to include youth.
  • 81. Customer and Competitor Orientations Customer-Centered Companies Advantages • Better position to identify new opportunities • Choose a course which delivers long-term growth and profits • Monitoring customer needs • Amazon.com
  • 82. Customer and Competitor Orientations Customer-Centered Companies Disadvantages • Counter attack by competitors • Odomos by Good Knight mosquito repellant • Good Knight became the leader