Presentation on theme: "Competitor Analysis Professor Chip Besio Cox School of Business Southern Methodist University."— Presentation transcript:
Competitor Analysis Professor Chip Besio Cox School of Business Southern Methodist University
Review of the Marketing Concept Focus on needs and wants customer Orient activities of firm to satisfy these needs Achieve long-term firm goals through customer satisfaction
The Marketing Concept and Competition Satisfaction of consumer needs implies that... the firm must satisfy the needs of target customers better than its competitors in order to be successful Competitive Advantage
Customer vs. Competitor Orientation Customer Orientation Customer Orientation Market Orientation Market Orientation Competitor Orientation Competitor Orientation Product Orientation Product Orientation Customer-Centered Competitor-Centered No Yes No Yes
Competitor Analysis Process Identifying Competitors Assessing Competitors Determining Objectives Selecting Competitors to Attack and to Avoid Selecting Competitors to Attack and to Avoid Identifying Strategies Assessing Strengths and Weaknesses Assessing Strengths and Weaknesses Estimating Reaction Patterns Estimating Reaction Patterns Source: Prentice Hall
I. Consider share of the target market and market share growth II. Side-by-side comparison against key competitors Emphasize relative standings III. Benchmark against the best Identify and Assess the Competition
Assess the Competition STRATEGY What is strategy? Activities across functions that result in delivering superior value What is value? Perceived benefits – Costs core value proposition What is a competitor’s core value proposition for the customer? Lowest customer costs (over time / for the same product or service)? Best performing product or service? Most complete solution to customer’s wants and needs?
Assessing Competitors SOURCES OF VALUE * Operational Excellence Performance Superiority Customer Intimacy Operational Competence Customer Responsiveness Product Differentiation * Adapted from CSC Index
Sources of Value OPERATIONAL EXCELLENCE Strengths Low price Basic service convenience and reliability Response to service problemsWeaknesses Limited product variety Less flexibility Product is usually not state-of-the-art
Sources of Value OPERATIONAL EXCELLENCE Strategies Strategies: Price or convenience leadership Examples Examples: (Henry Ford), Price/Costco, Dell computer, GE appliances, Wal-Mart Execution Execution: Commitment to consistent, everyday low price Reliable service Often exploits process technologies
Sources of Value PERFORMANCE SUPERIORITY Strengths Best products on the market Innovative processes and/or products Leads in new product technology, featuresWeaknesses High price Low service response Not as responsive to differences across individual needs
Sources of Value PERFORMANCE SUPERIORITY Strategies Strategies: Offer leading-edge products and services that define state-of-the-art or enhance a customer’s use or application Examples Examples: Lexus, Apple, Microsoft, Sony Execution Execution: Focus on R&D in order to develop products with better performance
Sources of Value CUSTOMER INTIMACY Strengths Expert at identifying and satisfying customer needs Tailored/customized products/ service Personalized communicationWeaknesses Not usually an innovator, but a quick follower Somewhat higher prices Often serve smaller markets
Sources of Value CUSTOMER INTIMACY Strategies Strategies: Micromarketing; continually surprising the customer with customized products and services to fit an increasing finer def’n. of “customer” Examples Examples: Cable and Wireless, Levis, Neiman Marcus, Ritz Carlton, Southwest Airlines Execution Execution: Exploit detailed databases, consumer research and extensive customer knowledge
Sources of Value and Competitive Advantage Aim to achieve leadership in one value discipline and parity in the other two Operational excellence Performance superiority Customer intimacy How do you judge success?
Assess the Competition COMPETITIVE RESPONSE What are the defensive capabilities of competitors? What would they be expected to do in response to our initiatives? What are possible offensive moves of competitors? Example Example: Dell Computer Direct Pick the battleground, if you can
SUMMARY Performance is driven by the ability to fulfill customer needs and wants, relative to competition Therefore the company must monitor both customers and competitors Project what competitors will do in response to company strategies and tactics To stay ahead, you must continue to get better!