Session

Competitive Analysis

Session Outline

Direct Competitors SWOT Analysis Opportunity Gaps Competitor Strategies Public Influences

This Session Weekly Activity:CRM Software Today many organisations use computers to help

them better manage their client relationships. A basic CRM system consists of a database

containing information about people with whom staff maintain relationships with.

Download the Reflect free CRM software at www.nchsoftware.com/crm/index.html.

Learn some of the fundamentals of CRM including customer information searching, time management, communication, sales forecasting, etc.

Evaluate it’s usefulness as a CRM tool.

Competition

Competitors, whether they be direct or indirect, influence the perception and behaviour of the marketplace.

International Competition

Increasing pressures of international competition competitors often enjoy the benefits

of lower wages, better productivity or favourable exchange rates

Activity in world markets firms opt to expand to overseas

markets.

Competition Organisations face competition

from three main sources: Brand—from manufacturers of similar

products. Substitute products—dissimilar

products satisfying the same needs. Indirect—other firms trying to win

customers purchasing power.

Competition Structures

How an organisation markets themselves is influenced by four types of competitive structures. Pure competition. Monopolistic Competition. Oligopoly. Monopoly.

Topic Example Video

The following video explains what are competitive structures.

Take note of the key points. http://www.youtube.com/watch?v=xINkXtVXvb

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Pure competition

A market structure where a large number of sellers sell an undifferentiated product.

Pure competition is rarely, if ever, attained in the real world. It is a theoretical concept. An ideal.

eg: some agricultural products(fruits, etc)

Monopolistic Competition

Marketers attempt to gain differential advantage over its competitors.

Marketer aims to get the buyer to perceive an attractive difference in their offerings.

Marketers have more control over products and price due to perceived differences.

Oligopoly

A market structure in which only a few large sellers, marketing essentially similar products, account for almost all of an industry’s sales.

eg air travel, beer,cigarettes.

Monopoly

A market structure where there is only one supplier of a product, for which there no close substitutes.

eg: CSR (sugar refining), electricity and gas suppliers (usually government owned).

monopolies are becoming rare in Australia (eg: even Telstra now has competition).

sometimes patent protection can provide firms with something close to a monopoly.

Competitor Analysis

Competitor Analysis Direct Competitors Market Share Sales Strengths/Weaknesses Competitor Strategies

Competitor Analysis

Competitor Analysis This section focuses on what your competitors do well (strengths)

and what they do poorly (weaknesses) Direct Competitors These are the people who would compete “directly” against you

to the same target market segments for the same business with the same or similar products and services

Market Share This is the percentage of the market that your direct competitors

hold for a particular geographic location

Competitor Analysis

Sales In this section market share is converted into $value sales. It

can also be broken down into unit sales. With a broad range of products, it is feasible just to include product groups

Strengths/Weaknesses In this section competitors products/services are analysed in

terms of their relative advantages and disadvantages over your products and services. The purpose here is to determine if you can effectively compete against your competitors.

Competitor Analysis

Competitor Strategies In this section the strategies and tactics your

competitors would use as a response to you starting up your business and entering the marketplace is analysed

Here you would consider what impact your competitor strategies would have on your business and being able to compete effectively against them.

Public Influences This includes any group of people (lobby,

public interest, minority) that have an actual or potential interest in, can influence or impact on the ability of the organization in and to achieving its goals.

Influences could be positive or negative. Organizations must be aware the various

publics and the influences they will have on their market, customers, competitors, suppliers and intermediaries.

Types of Publics

Competitive Analysis

Supply details of the major competitors. Who are the competitors in each

segment? What are they likely to do in the future? Consider if any new competitors are

likely to enter the industry? Consider if any competitors are likely to

leave the industry?

Competition Information

A. Market share; B. Market position; C. Product or service position; D. Selling methods;E. Service methods; F. Promotion methods; and G. Financial position.

Activity: Competition??? Competition may come from:

fellow exporters (home country) (www.australianexporters.net) (www.dynamicexport.com.au) (www.thinkglobal.com.au)

international competitors (other countries) (www.gksoft.com/govt/en/) (http://unstats.un.org/unsd/comtrade/) (www.library.auckland.ac.nz/subjects/stats/offstats/OFFSTATSmain.html)

local suppliers (import country) (www.alibaba.com)

Given your selected export product, develop a competitor list that you would consider as “direct competitors”.

Direct Competitor Analysis

Direct Competitors The easiest way to find out who the people who would compete

“directly” against you to the same target market segments for the same business with the same or similar products and services would be to use the Yellow Pages.

The assumption is that the location the Yellow Pages Directory service would be the size of your location. If you select a Local Yellow Pages, then you would need to consider how would determine the size of that location.

Tip: Use number of listings under appropriate heading.

Direct Competitor Analysis Market Share This is the percentage of the market that your direct competitors hold for a

particular geographic location From ABS, all that is required are:

Location population Industry revenue

Use population % to determine $revenue for region. Apply 80/20 rule to regional revenue calculation

80% revenue 20% Competitors (large) 15% revenue 30% Competitors (intermediate) 5% revenue 50% Competitors (small)

Topic Example Video

The following video explains what is the 80/20 rule.

Take note of the key points. http://www.youtube.com/watch?v=wu1oGBzAc

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Direct Competitor Analysis

Consider you are one of the 50% competing for 5% of the revenue.

Convert $revenue figure to a %. Sales Instead of converting the $revenue to a %,

compare the 80/20 rule calculation to the to the average $revenue per business, ie.

$revenue for specific location region divided by no. of businesses (total number of listings + 1)

What can be deduced from this comparison?

Competitor Strategy Analysis

Apart from considering how your competition competes in the marketplace, it is also important to consider how their products and services are:

priced promoted (inc. selling methods) positioned and supplied (inc. servicing methods)

within the market to the various market segments that are your customers

Your analysis should also discuss how you would respond or effectively compete against these strategies.

Organisation’sResources/Abilities

Organisation’sOpportunities

Opportunities inthe Environment

Opportunity Gaps

Topic Example Video

The following video explains what is SWOT analysis.

Take note of the key points. http://www.youtube.com/watch?v=GNXYI10Po

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Definition

Definition of opportunity: Opportunities are positive external

environmental factors that an organisation can exploit.

Definition of threat: Threats are negative external environmental

factors to be faced by the organisation.

SWOT Diagnosis

Conducting a SWOT diagnosis means to assess the significance of the identified opportunity, influence or threat factors as to it’s level of impact on the organisation

Each factor is rated on a) its degree of significance and b) its probability of occurrence.

StrengthsStrengths OpportunitiesOpportunities

ThreatsThreatsWeaknessesWeaknesses

InternalInternal ExternalExternal

InternalInternal

ExternalExternal

Strengths & Weaknesses

SWOT Factor Rating

PursuePursue ReviewReview

IgnoreIgnoreMonitorMonitor

HighHigh LowLowOpportunity SignificanceOpportunity Significance

HighHigh

LowLow

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Opportunity Matrix

Organisational Competitiveness

Does the organisation have the necessary resources to export and to counter-act likely competitor threats? Consider this in the areas of:

Management Human Resources Finance Production and Operations Systems and Structure.

Basic Competitive Strategies Overall cost leadership

Producing standardised product at a low cost

Differentiation Market a USP (Unique Selling Proposition)

Focus Concentration on a small specialty

market

Basic Competitive Strategies

Market leadership Looks to expand the market as the major player

Market Challenger Look to take over Market Leader position using an

aggressive strategy Market Follower

Copy the Market Leader without drawing undue attention

Market Niche Filling an overlooked gap or small specialty market

Export Competitive Strategy

Given how your competition competes in the marketplace, it is also important to consider how you intend to compete as well, ie. as a:

leader challenger follower or niche

Within each market segment you pursue, what will be your emphasis?

cost differentiation (ie. benefits) focus (ie. customer satisfaction).

Understanding this provides specific criteria for your promotional strategy.

Activity: Floor Cleaner Suppliers

Using at least 2-3 of Yellow Pages directories determine how many Floor Cleaner Liquid suppliers there are in South Korea.

Try using as references: www.koreayellowpage.net and www.southkoreapages.com Were you successful? Consider how difficult or easy it

was. Now use the supplier database (www.alibaba.com) for

local suppliers in South Korea Use Boolean Operators to narrow your search Analyse your search results and list organisations.

Weekly Activity: Census Data Market research often involves sourcing Census Data. In

Australia there is the Australian Bureau of Statistics, a federal government department that provides this information

Using the (www.google.com) website, search for Government sources providing census or statistical data in the country you intend to export to

Check to see if this website has an “English” language option

If not and you don’t have an interpreter, try using the Austrade (www.austrade.gov.au)/Foreign Affairs (www.dfat.gov.au) websites for suitable links.

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