1 competitor analysis at the end of this module the learning outcomes are: -importance of...
TRANSCRIPT
![Page 1: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/1.jpg)
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
![Page 2: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/2.jpg)
2
Competitor analysis
Suggested Readings
• Strategic Marketing Management by Wilson & Gilligan (chapter 4)
• Strategic Marketing by: David Cravens (chapter 7)
![Page 3: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/3.jpg)
3
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.
![Page 4: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/4.jpg)
4
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
5. Power of suppliers
![Page 5: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/5.jpg)
5
Competitor analysis1. 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
![Page 6: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/6.jpg)
6
Competitor analysis2. 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 picks up.
![Page 7: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/7.jpg)
7
Competitor analysis3. 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
![Page 8: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/8.jpg)
8
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
![Page 9: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/9.jpg)
9
Competitor analysis4. 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
![Page 10: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/10.jpg)
10
Competitor analysis
– New addition of capacity have created excess capacity
Hotel industry Automobile industry
– Product homogeneity necessitates activity to maintain share.
» Coke versus Pepsi
![Page 11: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/11.jpg)
11
Competitor analysis5.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
![Page 12: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/12.jpg)
12
Competitor analysisAgainst whom are we competing
- Looks straight forward
- Is not usually the case
E.g: Bajaj Auto
1.Underestimation of LML
2.Undermining the strengths of Hero Honda
- Gestetner underestimation of Xerox
- Extinction of British and U.S television companies by Japanese organizations
- Sharp attack by Symphony aesthetic coolers over traditional coolers
![Page 13: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/13.jpg)
13
Competitor analysis
• Earlier clarity was high
• Now blurred
• Poor anticipation– VCR industry in 80s– decline
![Page 14: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/14.jpg)
14
Competitor analysis
Marketing Myopia
• Theodore Levitt
• Marketing Guru
• How business is defined
• Why American rail business a massive decline
• Onslaught of airlines
![Page 15: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/15.jpg)
15
Competitor analysis
THE COURIER MARKET
• came in 70s
• Launch of fax
• Later email
• How players handled competition
![Page 16: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/16.jpg)
16
Competitor analysis
Two approaches
• Adopt new products
• Strengthen existing business
![Page 17: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/17.jpg)
17
Competitor analysis
Adopt new products
IBM
• Hardware in 70s
• Threat from low-cost producers
• Shifted focus to software
![Page 18: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/18.jpg)
18
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
![Page 19: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/19.jpg)
19
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
![Page 20: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/20.jpg)
20
Competitor analysis
MOSQUITO REPELLANT DEVICES
BALSARA
• Launched ODOMOS in 1964
• Unattended need
• Cream based product
• Inhouse R & D
• Earlier smoke sensing devices were used
![Page 21: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/21.jpg)
21
Competitor analysis
• 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
![Page 22: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/22.jpg)
22
Competitor analysis
• 1984
• Goodknight brand
• No use of cream or coil
• Value proposition– Cleaner– Less messy– Convenient
![Page 23: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/23.jpg)
23
Competitor analysis
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
![Page 24: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/24.jpg)
24
Poor understanding of the competition
• Decline– Air coolers– Mopeds– Soya-based drinks
![Page 25: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/25.jpg)
25
Competitor analysisCompetition happens at four levels1.Companies offering only similar products
- Kitkat versus Perk
- Nescafe versus Bru
2.Companies consisting of all companies operating in the same category
- Cadbury's Eclairs versus. Nestle Kitkat
- Canada Dry versus Pepsi Cola
![Page 26: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/26.jpg)
26
Competitor analysisCompetition at four levels(Contd.,)
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
4. Competition consists of all companies competing for the same spending power
- Dishwasher versus Microwave oven
- Designer jewellery versus Ritu Beri's fabrics
- Debeer’s versus Nokia mobile phones
![Page 27: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/27.jpg)
27
Competitor analysis
IDENTIFYING COMPETITORS LIKELY RESPONSE PROFILES
Three issues• How competitor is likely to respond to the general
changes taking place in the external environment?• How competitor is likely to respond to specific
moves that we make?• Is the competitor likely to initiate an aggressive
move?
![Page 28: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/28.jpg)
28
Competitor analysis
COMPETITOR PROFILES
• The laid-back competitor
• The selective competitor
• The tiger competitor
• The stochastic competitor
![Page 29: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/29.jpg)
29
Competitor analysis
The laid-back competitor
• Competitors do not react
• Feel customers may stay loyal
• Lack resources to react
![Page 30: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/30.jpg)
30
Competitor analysis
The selective competitor
• React to selective moves of competitor
• Modi Xerox versus HCL copiers
![Page 31: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/31.jpg)
31
The tiger competitor
• React swiftly
• Strong reply
• Signal that it is going to fight
• Surf versus Ariel
Competitor analysis
![Page 32: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/32.jpg)
32
The stochastic competitor
• Do not exhibit any predictable pattern
• No trends available
• Could exhibit any type of competitor
Competitor analysis
![Page 33: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/33.jpg)
33
Competitor analysis
COMPETITIVE EQUILIBRIUMFive scenariosIf 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
![Page 34: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/34.jpg)
34
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
![Page 35: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/35.jpg)
35
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
![Page 36: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/36.jpg)
36
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.
![Page 37: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/37.jpg)
37
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.
![Page 38: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/38.jpg)
38
Competitor analysis
INDUSTRY STRUCTURE TYPES
Five types
• Pure monopoly
• Differentiated oligopoly
• Pure oligopoly
• Monopolistic competition
• Pure competition
![Page 39: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/39.jpg)
39
Competitor analysis
Pure monopoly
• High prices
• Little advertising
• Low service levels
• Barriers to entry exist
![Page 40: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/40.jpg)
40
Competitor analysis
Differentiated oligopoly
• Differentiation through quality, features
• Reflected by the price premium which is available
• INTEL experience
![Page 41: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/41.jpg)
41
Competitor analysis
Pure oligopoly
• Differentiation is difficult
• Going-rate pricing
• Sustainable competitive advantage is through cost-reductions
![Page 42: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/42.jpg)
42
Competitor analysis
Monopolistic competition
• Organizations look for markets where scope of competition minimizes
• Pricing premium can be attained
• Retailing in India
![Page 43: 1 Competitor analysis At the end of this module the learning outcomes are: -Importance of understanding competition -Approaches to competitor analysis](https://reader035.vdocuments.net/reader035/viewer/2022081513/56649cda5503460f949a3d7b/html5/thumbnails/43.jpg)
43
Competitor analysis
Pure competition
• No scope for differentiation
• Same prices
• Psychological differentiation
• Profits determined by cost management