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A Framework for Competitor Analysis

Management 619
by

Lynn Palmer

on 26 March 2014

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Transcript of A Framework for Competitor Analysis

A Framework for Competitor Analysis
The Components of a Competitor Analysis
Other;
Assumptions
Examining assumptions will identify biases or
Areas of a competitors strengths & weaknesses
Products
Future Goals
1 Future Goals
All Levels of Management
4 Capabilities
This can show both Strengths and Weaknesses
Competitor's Response Profile
3 Current Strategy
How the Business is currently competing
2 Assumptions
The competitor's assumptions held about itself and the industry
In multiple dimensions
Future Goals
Overall goals
Performance targets
Reasons they got into business
Strategic importance in terms of corp. strategy
Economic relationship with other parent comp.
Current results (sales growth, rate of return...)
Antitrust, regulatory, or social sensitivities
Control in overall corporate scheme
Corporate wide values & beliefs
emotional attachment
Diversification plans
Capabilities
Four Diagnostic Components to analyze a competitor
Future goals
Current strategy
Assumptions
Capabilities

Sensing your competitor
Are they satisfied with current position?

What moves/shifts will they make?

Where are they vulnerable?

What will provoke them to retaliate?
Business Unit Goals
Financial Goals
Attitude toward risk
Organizational Structure
Control/ incentive system
The different kinds of managers
Contractual Commitments
Accounting system
Values or beliefs
Corporate Parent & Business Unit Goals
Portfolio Analysis & Competitor's Goals
What beliefs about its relative position
Historical or emotional identification
Cultural, regional, or national differences
Organizational values or canons
Future demand and trends
History/ conventional wisdom
Current strategy
The significance of Perceiving Blind Spots or Conventional Wisdom
Analysis
Develop statements
Strategy = key operating policies
Implicit
explicit
Putting the Four components Together
Is the Competitor Satisfied with its current position?
What Criteria are used to classify businesses at the competitor's parent if a classification scheme is in use and how is each business classified?
Answer:
The portfolio analysis of the parent company will provide the clues.
blind spots
What is a blind spot?
These are areas where competitors will not see events such as strategic moves
Capabilities are the final step in competitor analysis
Likelihood
Timing
Nature
Intensity
Of competitors reactions
Marketing & Selling
Operations
Research & Engineering
Overall Cost
Financial Strength
Organization
Gerneral Managerial Ability
Corporate Portfolio
Core Capabilities
Ability to Grow
Quick Response Capability
Ability to Adapt to Change
Staying Power
What will provoke the greatest and most effective retaliation by the competitor?
Where is the competitor vulnerable?
What likely moves or strategy Shifts will the competitor make?
Offensive Moves
1st step
1.Compareing the competitor's goals
3. What will they gain from these moves
2. Finding out strategic moves the competitor will make
Defensive Capability
Step 2
What governmental changes might make competitor vulnerable?
What moves threaten a competitors goals?
How can you impede the reactions of competitors so they cannot be effective?
Figure 3-3
Events:
Feasible
Strategic Moves
by our firm
List all alternatives
Feasible
Environmental
Changes
List all changes
Vulnerability of
the
competitor
to the event
Degree to which
the Event will Provoke
Retaliation by
the Competitor
Effectiveness of
the Competitor's
Retaliation to the
Event
REASON
Used to Forecast future industry conditions
When using these diagnostic components it will sum up competitors changes and make them easily seen.
Functions of a Competitor Intelligence System
Strategy Formulation:
"One always exists in one form or another
Compiling Data
Clippings
Interviews
REPORTS
Cataloging the Data
Files
Abstracting Sources
Computer Cataloging
Digestive Analysis
Ranking Data
Summarizing Data
Financial Analysis
Estimations of costs
Communication to Strategist
Regular Compilations
Updated Reports
NEWSLETTERS
Briefings
Competitor Analysis for Strategy Formulation
Any Questions?
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