Induce your competitors not to invest in tho products, markets and rvices where you expect to invest the most . . . that is the fundamental rule of strategy.
—Bruce Henderson, founder of BCG
graveyardThere is nothing more exhilarating than to be shot at without result.
—Winston Churchill
The best and fastest way to learn a sport is to watch and imitate a champion.
—Jean-Claude Killy, skier
T here are numerous well-documented reasons why the Japane automobile firms were able to penetrate the U.S. market successfully, especially during the 1970s. One important reason, however, is that they were much better than U.S. firms at doing competitor analysis.1
David Halberstam, in his account of the automobile industry, graphically described the Japane efforts at competitor analysis in the 1960s. “They came in groups. . . . They measured, they photographed, they sketched, and they tape-recorded everything they could. Their questions were preci. They were surprid how open the Americans were.”2The Japane similarly studied European manufacturers, especially their design approaches. In contrast, according to Halberstam, the Americans were late in even rec-ognizing the competitive threat from Japan and never did well at analyzing Japane firms or understanding the new strategic imperatives created by the revid competitive environment, even though the Japane car firms were very open about their methods.
Competitor analysis is the cond pha of external analysis. Again, the goal should be insights that will influence the development of successful business strategies. The analysis should focus on the identification of threats, opportunities, or strategic uncer-tainties created by emerging or potential competitor moves, weakness, or strengths.
Competitor analysis starts with identifying current and potential competitors. There are two very different ways of identifying current competitors. The first examines the
Competitor Analysis 40
perspective of the customer who must make choices among competitors. This approach groups competitors according to the degree to which they compete for a buyer’s choice.The cond approach attempts to place competitors in strategic groups on the basis of their competitive strategy.
After competitors are identified, the focus shifts to attempting to understand them and their strategies. Of particular interest is an analysis of the strengths and weakness of each competitor or strategic group of competitors. Figure 3.1 summa-rizes a t of questions that can provide a structure for competitor analysis.IDENTIFYING COMPETITORS—CUSTOMER-BASED APPROACHES
One approach to identifying competitor ts is to look at competitors from the per-spective of customers—what choices are customers making? A Cisco buyer could be asked what brand would have been purchad had Cisco not made the required item.
A buyer for a nursing home meal rvice could be asked what would be substituted for granulated potato buds if they incread in price. A sample of sports car buyers could be asked what other cars they considered and perhaps what other showrooms they actually visited.
Brand-U Associations
Another approach that provides insights is the association of brands with specific-u contexts or applications. Perhaps twenty or thirty product urs could be asked to Chapter 3Competitor Analysis 41
WHO ARE THE COMPETITORS?
●Against whom do we usually compete? Who are our most inten competitors? Less inten but still rious competitors? Makers of substitute products?
●Can the competitors be grouped into strategic groups on the basis of their asts, competencies,
and/or strategies?
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●Who are the potential competitive entrants? What are their barriers to entry? Is there anything that can be done to discourage them?
EVALUATING THE COMPETITORS
●What are their objectives and strategies? Their level of commitment? Their exit barriers?●What is their cost structure? Do they have a cost advantage or disadvantage?
●What is their image and positioning strategy?
●Which are the most successful/unsuccessful competitors over time? Why?
●What are the strengths and weakness of each competitor or strategic group?●What leverage points (or strategic weakness or customer problems or unmet needs)could competitors exploit to enter the market or become more rious competitors?●How strong or weak is each competitor with respect to their asts and competencies?Generate a competitor strength grid.
Figure 3.1Questions to Structure Competitor Analysis
identify a list of u situations or applications. For each u context they would then name all the brands that are appropriate. Then for each brand they would identify appropriate u contexts so that the list of u contexts would be more complete.Another group of respondents would then be asked to make judgments about how appropriate each brand is for each u context. Then brands would be clustered bad on the similarity of their appropriate u contexts. Thus, if Doritos was per-ceived as a snack, its t of competitors would be different than if it was perceived as a party enhancer. The same approach will work with an industrial product that might be ud in veral distinct applications.
Both the customer-choice and brand-u approaches suggest a conceptual basis for identifying competitors that can be employed by managers even when marketing rearch is not available. The concept of alternatives from which customers choo and the concept of appropriateness to a u context can be powerful tools in helping to understand the competitive environment.
Indirect Competitors
In most instances, primary competitors are quite visible and easily identified. Coke competes with Pepsi, other cola brands, and private labels such as President’s Choice.CitiBank competes with Cha, Bank of America, and other major banks. NBC com-petes with ABC, CBS, and Fox. Boeing competes with Airbus. The competitor analy-sis for this group should be done with depth and insight.
In many markets, however, customer priorities are changing, and indirect competi-tors offering customers product alternatives are strategically relevant. Understanding the indirect competitors can be strategically and tactically important, as the following examples demonstrate.
●Coke focud on Pepsi and ignored for many years the emerging submarkets in water, energy drinks, and fruit-bad drinks. The result was a misd
opportunity and the eventual need to pursue an expensive and difficult
想法的英文memories是什么意思catch-up strategy.
●While the major television networks struggle against each other, independent networks have emerged. Strong cable networks, such as ESPN, Fox, HBO,and CNN, have flourished; pay-per-view, Netflix, computer games, mobile applications, and the Internet are competing for the leisure time
of viewers.
●While banks focud on competing banks, their markets were eroded by mutual funds, insurers, and brokers.
●While Folgers, Maxwell Hou, and others competed for supermarket busi-ness using coupon promotions, other firms, such as Starbucks, succeeded in lling a very different kind of coffee in different ways. And Starbucks has more recently been threatened by gourmet coffee makers sold for home u and by alternatives offered by chains like Dunkin’ Donuts and McDonald’s.●Steel minimills were ignored by the major steel firms until they gradually became a major player.
42Part One Strategic Analysis
The energy bar category, established in the mid-1980s by PowerBar, includes direct competitors such as Clif, Balance, and dozens of small, local niche firms. There are also a host of indirect competitors, many with very similar products: candy bars (Snickers was called “the energy bar” for many years), breakfast bars, meal replacement bars, diet bars, granola bars, and the cereal bar category.Understanding the positioning and new product strategies of the indirect com-petitors will be strategically important to business in the energy bar category.
Both direct and indirect competitors can be further categorized in terms of how relevant they are, as
wmentertainmentdetermined by similar positioning. Thus, candy bars will be more relevant to Balance than to PowerBar becau of where the former has positioned itlf (Balance Gold is even marketed as being “like a candy bar”). For the same rea-son, Clif will be a clor competitor to PowerBar than to Balance.
The competitive analysis in nearly all cas will benefit from extending the per-spective beyond the obvious direct competitors. By explicitly considering indirect competitors, the strategic horizon is expanded, and the analysis more realistically mir-rors what the customer es. In the real world, the customer is never restricted to a firm’s direct competitors, but instead is always poid to consider other options.
A key issue with respect to strategic analysis in general, and competitor analysis in particular, is the level at which the analysis is conducted. Is it at the level of a busi-ness unit, the firm, or some other aggregation of business? Becau an analysis will be needed at all levels at which strategies are developed, multiple analys might ultimately be necessary. For example, when Clif developed Luna, an energy bar designed for women, PowerBar countered with Pria. The manager of the Luna business may need a competitive analysis of energy bars for women, in which ca the other energy bars might be considered indirect competitors.
IDENTIFYING COMPETITORS—STRATEGIC GROUPS
The concept of a strategic group provides a very different approach toward understand-ing the competitive structure of an industry. A strategic group is a group of firms that:
●Over time pursue similar competitive strategies (for example, the u of the same distribution channel, the same type of communication strategies, or the same price/quality position)
●Have similar characteristics (e.g., size, aggressiveness)
●Have similar asts and competencies (such as brand associations, logistics capability, global prence, or rearch and development)
For example, there have historically been three strategic groups in the pet food industry, which is the subject of an illustrative industry analysis in the appendix to this book. One strategic group consists of very large diversified, branded consumer and food product companies. All distribute through mass merchandirs and supermar-kets, have strong established brands, u advertising and promotions effectively, and enjoy economies of scale. The major players include Nestlé Ralston Petcare, Del Monte, and Mars.
Chapter 3Competitor Analysis 43
A cond strategic group of highly focud ultra-premium producers, such as Hill’s Petfood (Science Diet and Prescription Diet) and the Iams Company, lls product through veterinary offices and specialty pet stores. They have historically ud referral networks to reach pet owners concerned with health. When P&G acquired Iams and introduced it into mass merchandirs and supermarkets, the distinction between the two strategic groups blurred and new competitive dynamics were introduced. Iams became a threat to established brands in this space and the Hill’s brands found their competitive context very different.
The third strategic group, private-label producers, is led by a unit of Del Monte (formerly Doanne) that supplies Wal-Mart and other major retailers.
In fact, many industries are populated by veral strategic groups: premium dominated volume entries such as United in airlines or Budweir in beer; low-cost entries such as JetBlue in airlines and Milwaukee’s Best in beer; and niche groups such as timeshare planes and low alcohol and craft beers.
Each strategic group has mobility barriers that inhibit or prevent business from moving from one strategic group to another. An ultra-premium group in pet food producers has the brand reputation, product, and manufacturing knowledge needed for the health gment, access to influential veterinarians and retailers, and a local customer ba. Private-label manufacturers have low-cost production, low overhead, and clo relationships with customers. It is possible to bypass or over-come the barriers, of cour. A private-label manufacturer could create a branded entry, especially if markets are lected to minimize conflicts with existing cus-tomers. The barriers are real, however, and a firm competing across strategic groups is usually at a disadvantage.
A member of a strategic group can have exit as well as entry barriers. For exam-ple, asts such as
plant investment or a specialized labor force can reprent a mean-ingful exit barrier, as can the need to protect a brand’s reputation.
The mobility barrier concept is crucial becau one way to develop a sustainable competitive advantage is to pursue a strategy that is protected from competition by asts and competencies that reprent barriers to competitors. Consider the PC and rver market. Dell and others marketed computers direct to consumers by tele-phone and the Internet. They developed a host of asts and competencies to sup-port their direct channels, including an impressive product support system.Competitors such as HP—which has ud indirect channels involving retailers and systems firms—have developed a very different t of asts and competencies. HP and Dell have both struggled to cross the channel barriers. Competition has largely been between the groups rather than brands. As the direct channel lost appeal while products matured and rvice problems emerged, HP gained in the marketplace.Using the Strategic Group Concept
备考雅思
The conceptualization of strategic groups can make the process of competitor analy-sis more manageable. Numerous industries contain many more competitors than can be analyzed individually. Often it is simply not feasible to consider thirty competitors,to say nothing of hundreds. Reducing this t to a small number of strategic groups makes the analysis compact, feasible, and
more usable. For example, in the wine 44Part One Strategic Analysiscartier是什么意思
industry, competitor analysis by a firm like Robert Mondavi might examine three strategic groups: jug wines, premium wines ($7 to $20), and super-premium wines (over $20). Little strategic content and insight will be lost in most cas becau firms in a strategic group will be affected by and react to industry developments in similar ways. Thus, in projecting future strategies of competitors, the concept of strategic groups can be helpful.
Strategic groupings can refine the strategic investment decision. Instead of determining in which ind
ustries to invest, the decision can focus on what strategic group warrants investment. Thus, it will be necessary to determine the current profitability and future potential profitability of each strategic group. One strategic objective is to invest in attractive strategic groups in which asts and competencies can be employed to create strategic advantage.
The emergence of a new strategic group or subgroup is of particular importance.It can create a dynamic that will affect strategies of all competitors for a long time period. Major disruptions to an industry often start small with inferior products so analysis needs to proceed with an eye toward projecting future offerings rather than assuming they will not evolve. Chapter 12 elaborates.
POTENTIAL COMPETITORS
高一数学In addition to current competitors, it is important to consider potential market entrants,such as firms that might engage in:
1.Market expansion.Perhaps the most obvious source of potential competi-tors is firms operating in other geographic regions or in other countries. A cookie company may want to keep a clo eye on a competing firm in an adjacent state, for example.
2.Product expansion.The leading ski firm, Rossignol, has expanded into ski clothing, thus exploiting a common market, and has moved to tennis
equipment, which takes advantage of technological and distribution
overlap.
davis cup3.Backward integration.Customers are another potential source of com-petition. General Motors bought dozens of manufacturers of components during its formative years. Major can urs, such as Campbell Soup, have integrated backward, making their own containers.
4.Forward integration.Suppliers attracted by margins are also potential competitors. Apple Computer, for example, opened a chain of retail stores.Suppliers, believing they have the critical ingredients to succeed in a
market, may be attracted by the margins, the control, and the visibility that come with integrating forward.
5.The export of asts or competencies.A current small competitor with critical strategic weakness can turn into a major entrant if it is purchad by a firm that can reduce or eliminate tho weakness
es. Predicting such moves can be difficult, but sometimes an analysis of competitor strengths Chapter 3Competitor Analysis 45
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