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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.

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Competitor Analysis


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    1. Competitor Analysis Professor Chip Besio Cox School of Business Southern Methodist University

    2. 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

    3. 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

    4. Customer vs. Competitor Orientation Product Orientation Customer Orientation Customer-Centered No Yes Competitor Orientation Market Orientation No Competitor-Centered Yes

    5. Identifying Competitors Competitor Analysis Process Assessing Competitors Determining Objectives Identifying Strategies Assessing Strengths and Weaknesses Estimating Reaction Patterns Selecting Competitors to Attack and to Avoid Source: Prentice Hall

    6. Identify and Assess the Competition 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

    7. Assess the CompetitionSTRATEGY • What is strategy? Activities across functions that result in delivering superior value • What is value? Perceived benefits – Costs • 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?

    8. Assessing CompetitorsSOURCES OF VALUE* Operational Excellence Operational Competence Product Differentiation Customer Responsiveness Customer Intimacy Performance Superiority * Adapted from CSC Index

    9. Sources of ValueOPERATIONAL EXCELLENCE • Strengths • Low price • Basic service convenience and reliability • Response to service problems • Weaknesses • Limited product variety • Less flexibility • Product is usually not state-of-the-art

    10. Sources of ValueOPERATIONAL EXCELLENCE • Strategies: Price or convenience leadership • Examples: (Henry Ford), Price/Costco, Dell computer, GE appliances, Wal-Mart • Execution: • Commitment to consistent, everyday low price • Reliable service • Often exploits process technologies

    11. Sources of ValuePERFORMANCE SUPERIORITY • Strengths • Best products on the market • Innovative processes and/or products • Leads in new product technology, features • Weaknesses • High price • Low service response • Not as responsive to differences across individual needs

    12. Sources of ValuePERFORMANCE SUPERIORITY • Strategies: Offer leading-edge products and services that define state-of-the-art or enhance a customer’s use or application • Examples: Lexus, Sony, Microsoft • Execution: Focus on R&D in order to develop products with better performance

    13. Sources of ValueCUSTOMER INTIMACY • Strengths • Expert at identifying and satisfying customer needs • Tailored/customized products/ service • Personalized communication • Weaknesses • Not usually an innovator, but a quick follower • Somewhat higher prices • Often serve smaller markets

    14. Sources of ValueCUSTOMER INTIMACY • Strategies: Micromarketing; continually surprising the customer with customized products and services to fit an increasing finer def’n. of “customer” • Examples: Cable and Wireless, Levis, Neiman Marcus, Ritz Carlton, Southwest Airlines • Execution: Exploit detailed databases, consumer research and extensive customer knowledge

    15. 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?

    16. Assess the CompetitionPERFORMANCE MEASURES • Customer satisfaction • Market share • Profitability • Customer retention

    17. Assess the CompetitionCOMPETITIVE 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: Dell Computer Direct Pick the battleground, if you can

    18. 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!