Competitor Analysis and Multimarket Competition The Role of Competitor Position

Transcription

Competitor Analysis and Multimarket Competition The Role of Competitor Position
Competitor Analysis
and
Multimarket Competition
The Role of Competitor Position
in Crafting Strategy
Know Your Rivals
What: their objectives and strategies
 Why? to predict their future strategies
• Why? to guide own strategies
What: their strengths and weaknesses
 Why? to compare with own strengths and weaknesses
• Why? to evaluate opportunities and threats
–Why? to build and sustain own position
Sources of information
 Recorded data, e.g, annual reports; press releases; newspaper articles;
analyst reports; tender offers; regulatory reports; government reports
 Observable data, e.g., pricing; advertising and promotion; seminars and
conferences; patent applications; presentations/speeches; trade shows
 Opportunistic (anecdotal) data: from suppliers; distributors; customers
and competitors; ex-employees
Hard-to-find information
 Overall sales and profits
 Sales and profits by market
 Sales by main brand
 Cost structure
 Market share (revenues and volume)
 Organization structure
 Distribution system
 Advertising strategy and spending
 Customer/consumer profile & attitudes
Multimarket Competition
 What: firms competing against each other in several markets in, e.g.,
 different geographical markets for the same products
 different parts of a vertical
 substitute markets
 Why
 Increase in related product diversification
 Increase in geographic market diversification
 Greater use of coordinated worldwide strategies
Results
 “Mutual forbearance”: benefit of aggressive action in any market is
reduced because rivals can retaliate in multiple common markets
 True for repeated actions (e.g., promotional activities) but not
introduction of innovations
Visual Aids
 Multimarket Competitor Chart: displays competitors in common markets
 Strategic Group Map: displays clusters of rivals along two dimensions of
industry positioning
Simple Multimarket Competitor Chart
2000
Firm
Operating
Systems
Google
Apple
X
Email
Photo Online Mobile
Editing Adv.
Phone
X
X
X
X
X
2011
Firm
Operating
Systems
Google
Apple
X
Email
Photo Online Mobile
Editing Adv.
Phone
X
X
X
X
X
X
X
X
Global Product-Market Competition
Industry/
Country
Industry/
Country
Industry/
Country
Industry/
Country
Client
Products:
a, c
Products:
c, d
Products:
a, b, c
Products:
b, c, d
Competitor #1
Products:
a
Products:
e
Products:
c, e
Products:
d, e
Products:
a, b, c, d, e
Competitor #2
Competitor #3
Products:
a, e
Competitor #4
Products:
a
Products:
a, e
Products:
a, b
Products:
a, b
Segment Multimarket Competition
Pet Food Industry
Economy
Average
Gourmet
Dog Food
Cat Food
Dry
Wet
Moist
Snack
Strategic Group Maps
 A strategic group consists of rival firms with similar competitive strategies
and positioning in an industry
 A strategic group map displays clusters of groups within an industry based
on two variables that you choose for their strategic significance.
Some Strategic Variables
 Specialization
 Brand identification (private label, brand)
 Distribution channels
 Product quality
 Vertical integration
 Cost position
 Service
 Price point
***Outcome variables like profit and market share should not be used to
distinguish competitive groups
Constructing a Strategic Group Map
1. Choose two variables that distinguish competitors
 Maximize contrast
 Minimize correlation
2. Plot on graph
3. Represent firm/group size with circle proportional to market share
OR
1. Begin grouping firms and then identify variables
2. Position firms on map
3. Represent firm/group size with circle proportional to market share
Example of Strategic Group Map in Stage 1
Luxury Goods Market
Hermes
10
Quality Level
Loro Chanel
Piana
Louis
Vuitton
Tiffany
Burberry
Gucci
1
$350
$500
Price Point
$1500
Luxury Goods Market: Potential Variables
 Target customer*
 Top tier: (24%) not affected by business cycles
 Aspirational: (36%) upper middle class; make luxury purchases “AOAP”
 Accessible luxury: (40%) affluent middle class; make occasional luxury
purchases when times are good
 Scope of products sold
 Degree of vertical integration
 Distribution channel
* Research by Bain and Co.
Interpreting the Map
 Fiercest rivalry occurs within strategic groups
 The closer the clusters, the stronger the rivalry
 Firms attempt moves into different segments as industry conditions change
 Mobility barriers: group-specific entry barriers that restrict movement
across groups
 Identify mobility barriers

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