Competitive Analysis and Product Positioning

Competitors Direct competitors Indirect competitors Local competitors Cross-over competitors

Identifying the Competitors -1 Product Direct Indirect Local Industry Cross-Over

Identifying the Competitors -2 Products’ feature and quality CRM strategies R&D strategies Marketing mix Price Promotion Distribution Supply-chain management

Competitor Profiling — Eastman Kodak 4/22/2017 Competitor Profiling — Eastman Kodak HP Olympus cameraworks.com Snapfish Eastman Kodak Purchase Camera Fuji Purchase Accessories Purchase Film Moto Photo Store Pictures on CD Take Pictures Direct Competition Indirect Competition Share Pictures Digitally Manipulate Pictures Seattle Filmworks Adobe Systems Print and Receive Pictures Download and Choose Pictures to Print Geocities District Shutterfly Snapfish Ofoto HP

COMPETITIVE ANALYSIS FLOWS OUT OF CUSTOMER ANALYSIS 4/22/2017 COMPETITIVE ANALYSIS FLOWS OUT OF CUSTOMER ANALYSIS Understand customers needs and wants Identify current and potential competitors Perform industry analysis, identify suppliers and common intermediaries Understand your competitors Determine competitor strategies (present and future)

COMPETITORS TO CONSIDER CURRENT market structure analysis perceptual analysis POTENTIAL (potential entry of new competitors) remain alert to their possibility depends on barriers to entry expectations about competitive reactions

Using a Perceptual Map for Competitor Analysis An Example: Using a Perceptual Map for Competitor Analysis A touch of class / a car to be proud to own Lincoln Porsche Cadillac Mercedes BMW Conservative looking / appeals to older people Chrysler Fun to drive / sporty look / appeals to younger people Buick Pontiac Oldsmobile Ford Chevrolet Dodge Nissan Toyota Plymouth VW Practical / affordable / good gas mileage

BARRIERS TO ENTRY OF NEW COMPETITORS Economies of Scale Lack of Product Differentiation Capital Requirements Access to Distribution Channels Buyer Switching Costs Government Policies and Regulations

COMPETITIVE RELATIONS CONFLICT COMPETITION COEXISTENCE COOPERATION COLLUSION

CONFLICT WITH COMPETITORS Focus on opponent Market is viewed as a zero-sum game (one gains only by taking from another) Competitors’ objectives are mutually inconsistent

COMPETITION Focus on winning something (usually customers) Depends on market attractiveness industry structure commitment of competitors technology required product differentiation

COMPETITOR COEXISTENCE Working Toward a Goal Independent of Others Different Niches of Market Available

COOPERATION Involves working together toward a common goal Three main types Dyadic Joint Activity Investment in a Third Party

THREE TYPES OF COMPETITOR COOPERATION Formal Cooperation Dyadic Joint activity Investment in third party Ownership Interlocking directorship Formal exchanges Subcontracting Reciprocity Production Sourcing R&D Promotion Consortia Joint ventures Trade associations

COLLUSION Cooperative Behavior Designed to Injure a Third Party customers suppliers non-colluding competitors general public Can be Direct or Indirect Often Illegal

GATHERING COMPETITIVE DATA Establish information-gathering system Identify your competitors Perform a competitive audit Evaluate results of the audit Regularly integrate into planning process

HOW DO YOU COMPETE? Offensive Strategies Defense Strategies Concentrate on the competitors’ relative weaknesses 5 types Defense Strategies Goal is to counter each offensive strategy 6 types

OFFENSIVE STRATEGIES 1) Frontal attack 2) Flanking attack direct confrontation most difficult and dangerous 2) Flanking attack addresses gaps in competition’s market coverage Niche market 3) Encirclement forcing competitor to spread resources thin by probing on many fronts at once 4) Bypass attack avoids confrontation diversification 5) Guerrilla warfare small, intermittent attacks

DEFENSE STRATEGIES 4) Flank-positioning 1) Position Defense extend firm’s offerings into new segments to protect existing 5) Counter-offensive Defense gathering resources and counter-attacking when threatened 6) Strategic Withdrawal 1) Position Defense fortify firm’s existing position 2) Mobile Defense Market broadening 3) Preemptive Defense Attacking first (first strike)

Partners Complementary partner Capability partner