1. Advanced Marketing BiMBA 2006
Chapter 4:
Competitor Analysis
“What are they going to do?”

2. Advanced Marketing BiMBA 2006
Competitor Analysis System
 1. Gather secondary data
 2. Gather primary data
 3. Answer key questions
 What are their product/service features?
 What are their objectives / strategy?
 4. Determine who has competitive edge
 5. Figure what they are going to do

3. Advanced Marketing BiMBA 2006
Secondary data
 Internal sources
 Internet
 Sales literature
 Local newspapers
 Business press
 Consultants

4. Advanced Marketing BiMBA 2006
Primary data
 Sales people
 Employees
 “mystery shoppers”
 Suppliers
 Accountants, lawyers, printers, etc.
 Consultants
 Investment bankers
 Help-wanted ads
 Trade shows
 Reverse engineering / benchmarking

5. Advanced Marketing BiMBA 2006
Comparing Product Features
Length Meals Transportation Price
Tour A 7 days all bus $3,450
Tour B 10 days breakfast bus & train $2,900
Tour C 13 days breakfast air and bus $5,500
& lunch

6. Advanced Marketing BiMBA 2006
Comparative size & growth (BCG)
Growth of industry
Comparative market share
Company A
Company B
Company C
Company E
Company D
= sales

7. Advanced Marketing BiMBA 2006
Determining Objectives
Objective Implication
Company A* Harvest increase price, decrease promos
Company B Hold maintain price and promos
Company C** Growth cut price, increase promos
increase distribution
*Company appears to be short of cash
**Short-term loss does not appear to be a concern

8. Advanced Marketing BiMBA 2006
Determining Core Strategy
Target Market Core Strategy
Company A teenagers high status & high price
Company B young adults comfort, fit, service & high price
Company C teenagers high style & low price

9. Advanced Marketing BiMBA 2006
Determining “Value Chain”
Inbound Operations Outbound Marketing Service
Company A + 0 + + +
Company B 0 + 0 0 +
Company C + 0 + - -

10. Advanced Marketing BiMBA 2006
Determining the “Marketing Mix”
Product Price Promotion Distribution
Company A hi quality hi price extensive specialty
TV, net stores
Company B hi quality medium limited specialty
hi service price TV, hi net stores
Company C lo quality lo price heavy net mass
lo service promos market

11. Advanced Marketing BiMBA 2006
Alternative “Marketing Mix” Analysis
Company A Company B Company C
Product: quality, value chain, benefits
Target Segment: who, where when, why
Place: distribution method and coverage
Promotion: cost and method
Advertising: strategy, media, timing & cost
Price: retail, trade

12. Advanced Marketing BiMBA 2006
Differential Advantage Analysis
Ability to… Company A, etc…..US
Conceive / design
technical resources
human resources
Produce
physical resources
human resources
Market
sales force
distribution system
service and sale policy
advertising
Ability to… Company A, etc…..US
Finance
debt
liquidity
cash flow
Manage
human resources
decision process
planning

13. Advanced Marketing BiMBA 2006
Critical Success Factors Comparison
Critical Success Company A Company B Company C US
Factors
1. hot design
2. Internet hype
3. trained sales reps
4. liberal return policy
5. mass distribution
Overall rating
(1 = low, 10= high)

14. Advanced Marketing BiMBA 2006
Assessing Competitors’ Will
Company A Company B Company C
How crucial is this very not very very
product to the firm?
How visible is the very none none
commitment to market?
How aggressive are very somewhat very
the managers?

15. Advanced Marketing BiMBA 2006
What now?
 What will be competitors’ strategies?
 1. continue as is
 2. change due to
 Changes in marketplace
 Changes in management
 Changes in financial goals
 How to determine new direction?
 Management judgment
 Simulation
 What will be competitors’ reaction to our strategy?