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University of Washington EMBA Program Regional 20. Marketing Management “Competitive Analysis” Instructor: Elizabeth Stearns. Course Structure. The Marketing Framework/Concept. Analysis 5C’s Opportunity Analysis. Marketing Research. Marketing Strategy & Customer Strategy

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university of washington emba program regional 20

University of Washington EMBA ProgramRegional 20

Marketing Management

“Competitive Analysis”

Instructor: Elizabeth Stearns

course structure
Course Structure

The Marketing Framework/Concept

Analysis

5C’s Opportunity Analysis

Marketing

Research

Marketing Strategy & Customer Strategy

Goal Setting,Segmentation, Targeting, and Positioning

Implementation/Action Plans

Marketing Mix (4 P’s)

how competitive forces shape strategy industry forces
“How Competitive Forces Shape Strategy”Industry Forces

Suppliers

New Directly

Competitive

Entrants

Direct

The

Firm

Competitors

Indirect

Competitors

Foreign

Low Priced

Different Industries

Substitute

Products

Technologies

Buyers

Michael Porter

competitor collaborator and company analysis
Competitor, Collaborator,and Company Analysis

Competitor:Any organization whose goods and services could provide the same benefits to your customers

Collaborator: Any organization who assists your own in the delivery of benefits to your customers

Company: Your organization

competitor collaborator and company analysis1
Competitor, Collaborator,and Company Analysis

Key Questions

  • Who are they?
  • What capabilities/skills/assets do they have?
  • How can/will they go to market?
    • Past behavior
    • Strategic signals
    • Optimal behavior, both strategies and reactions
    • Mission and objectives

Might organize your thoughts in a SWOT analysis.

competitors definition
Competitors: Definition

Any organization whose goods and services could satisfy the same needs or wants of your customers

Define competition broadly

Actual competitors (in the market now)

Potential competitors (may enter the market)

Direct competitors (offer similar products or services)

Indirect competitors (offer substitute products or services)

Business units within our firm

the broad view of the soft beverage market
The Broad View of the Soft Beverage Market*

Strong

Taste

Iced Tea

& Coffee

Cola

Soft Drinks

Club

Sodas

Sports

Drinks

Bottled &

Mineral

Waters

Noncola

Soft Drinks

Fruit

Juices

Fruit

Drinks

Fruit

Flavor

Bitter Tasting

Sweet Tasting

*Roger Best

competitors definition1
Competitors: Definition
  • Anticipate future competition
  • Consider not only product/market competition, but also competition between organizations
analyzing competitors

Objectives

Competitor

Actions

Strategies

Reaction

Patterns

Strengths &

Weaknesses

Analyzing Competitors

©2000 Prentice Hall

industry competition
Industry Competition
  • Number of Sellers - Degree of Differentiation
  • Entry, Mobility, Exit barriers
  • Cost Structure
  • Degree of Vertical Integration
  • Degree of Globalization

©2000 Prentice Hall

structural determinants of entry
Structural Determinants of Entry
  • Economies of Scale and Scope
  • Capital Requirements
  • Government Regulations
  • Technology & Patents
  • Threat of Competitive Retaliation
  • Other Market-oriented Characteristics
positioning and perceptual maps
Positioning and Perceptual Maps
  • Useful to provide pictorial view of competitive situation.
  • Information revealed:
    • What are the major perceptual dimensions underlying the map?
      • e.g. When customers were judging the similarities of ten brands, what were the most important attributes underlying their perceptual decisions?
      • Subjective/subject to argument
positioning and perceptual maps1
Positioning and Perceptual Maps
  • What brands are perceived as similar to others?
    • Deals with issue of substitutability.
    • if customer’s brand is not available, what brand is most likely to be purchased?
        • Unique Position
          • Or
        • Easy switching
positioning and perceptual maps2
Positioning and Perceptual Maps
  • What holes exist for repositioning an old, or new product introduction? (Point on map where no competitive brands exist)
    • Opportunity or not?
  • Ideal points = Preference maps
    • If customer could have any product they wished.
slide18

Brand Development Index & Category Development Index(or using sales information that most companies have!)

brand development index bdi2
Brand Development Index (BDI)

Markets “C” & “E need support, “A”, “B”, and “D” seem OK

bdi compared to cdi2
BDI Compared to CDI

Consider possible different conclusions: Market “D” is only average,

“C” & “E” probably don’t need support, “A” probably does.

differential advantage definition
Differential Advantage: Definition

A Differential Advantage is a benefit or cluster of benefits that customers value and believe they cannot obtain elsewhere

(Acid test: they are willing to pay more for your product or service)

designing offers for customers
Designing Offers for Customers

Product

Price

Time

Effort

Risk

Delivery

Services

Sales

Relation-

ship

Technical

Innovation

Brand

Equity

Value

Cost

Offer

differential advantage shift over time
Differential Advantage: Shift Over Time

Psychological

  • Differential advantage sustained by focusing on functional or psychological values
  • Tends to erode over time in the direction of economic advantages
  • Competition drives offers from specialty to commodity

Functional

Economic

differential advantage discussion
Differential Advantage: Discussion

The question that is answered is “do we deliver that which our customer/prospect values”, “by what means”, and “how well” (is it superior to our competition).

it is NOT

“what do we do well” as a stand alone question. This concept is difficult for companies to integrate into the selling mode especially when they pride themselves in what they do well and/or are considered the gold standard.

differential advantage discussion1
Differential Advantage: Discussion

While a company may have excellent strengths and assets, these are only important if they satisfy a customer need. (this is the Marketing concept)

Differential Advantage analysis raises the bar for understanding what a customer needs and the priority/importance of that need to his/her organization.

If a company does not know this, they proceed to sell what they do well, and not what the customer values.

sources of differential advantage
Sources of Differential Advantage

Business strengths, often defined as assets and skills, provide the basis for differential advantage.

  • An asset is something a firm possesses such as a brand name, a retail location, human capital, a philosophy, etc., which is superior to that of competition.
  • A skill is something that a firm does better than its competitors, such as advertising, merchandising, efficient manufacturing, etc.
differential advantage matrix
Differential Advantage Matrix
  • Tool for matching a segment’s required benefits with our organization’s ability to deliver those benefits more effectively than competitors

1. Identify the segment for which this matrix will apply

2. List the priority-ordered benefit requirements for this segment as the row headings in the matrix

3. List the relevant business strengths that a “generic” organization would require to deliver these benefits as the column headings of the matrix

differential advantage matrix1
Differential Advantage Matrix
  • Assessment Diagnostics (presuming that this business strength is relevant to providing this benefit—if not leave blank or use NA)
    • Do we have the capability to deliver the required customer benefit? (1 or Y)
    • Do we have significantly greater capabilities than competitors? (1 or Y)
    • Would it be difficult for competitors to match us? (1or Y)
    • (if you get to 0, or No, you stop)
differential advantage matrix2
Differential Advantage Matrix
  • Implications
    • Do we have a differential advantage, i.e., (1,1,1) or (Y,Y,Y)?
      • If so, where, and through what strengths?

Our organization has a differential advantage in delivering benefit X to segment Y because of business strengths A, B, and C.

differential advantage matrix3
Differential Advantage Matrix

Relevant Business Strengths

Segment

ID/Description

Opportunistic, solo,

weekend leisure

travelers

Broad collaborator-provider network

Broad collaborator-provider network

High brand awareness among end-

High brand awareness among end-

Patented reverse auction business

Patented reverse auction business

Demonstrable track record with

Demonstrable track record with

adaptive marketing affiliates

adaptive marketing affiliates

Priority

model

model

users

users

Benefit

Ranking

Low out-of-pocket

1,1,1

1,0

1

Price allows add ons

2

3

4

5

6