1. Competitor Analysis  Future Objectives What drives the competitor?  Current & Future Strategy  Assumptions Themselves Competitors Industry  Resources & Capabilities Use previously discussed analytical techniques (1) Anticipate, plan, & respond to competitor actions and responses (2) Develop offensive & defensive strategies

2. Rivalry Among Established Companies  The intensity of competitive rivalry in an industry arises from: Industry’s competitive structure. Demand (growth or decline) conditions in industry. Height of industry exit barriers.

3. Growth in Demand and Capacity

4. Competitive Structure: Number & Relative Competitiveness of Companies Continuum of Industry Structures Fragmented Many firms, no dominant firm Few firms, shared dominance (oligopoly) Consolidated One firm or one dominant firm (monopoly)

5. Which Companies are in Strongest / Weakest Positions?  One technique for revealing the different competitive positions of industry rivals is strategic group mapping  A strategic group consists of those rivals with similar competitive approaches in an industry

6. Strategic Group Mapping  Firms in the same Strategic Group have two or more competitive characteristics in common... Sell in same price/quality range Cover same geographic areas Be vertically integrated to same degree Have comparable product line breadth Emphasize same types of distribution channels Offer buyers similar services Use identical technological approaches

7. Strategic Groups Within Industries  Implications of strategic groups Within an industry, competitors tend to group according to similar strategies that differ from other groups. The closest industry competitors are those in the group. The various industry groups are differentially and competitively advantaged and positioned. Mobility barriers inhibit the movement of competitors from one strategic group to another.

8. Strategic Groups in the Pharmaceutical Industry

9. Procedure: Constructing a Strategic Group Map STEP 1: Identify competitive characteristics that differentiate firms in an industry from one another STEP 2: Plot firms on a two-variable map using pairs of these differentiating characteristics STEP 3: Assign firms that fall in about the same strategy space to same strategic group STEP 4: Draw circles around each group, making circles proportional to size of group’s respective share of total industry sales