Keys Variables in Analyzing Competitors

Share of Market

The competitors share of the target market The percentage of customers who named the competitor in responding to the statement Name the first company that comes to mind in this industry
The percentage of customers who named the competitor in responding to the statement Name the company from whom you would prefer to buy the product

Share of Mind

Share of Heart

Market Challenger Strategies Choosing Attack Strategy:

4. Bypass Attack
2. Flank Attack

Attacker

1. Frontal Attack
3. Encirclement Attack

Defender

5. Guerrilla Attack

Examples of Market Challenger Strategies

Frontal: Reduction in prices by Hyundai santro

Flank: Hero Hondas launch of CD 1000 in late 1980s

was a frontal attack on then exiting leaders in the motorcycle segment. Bypass: Pepsi s bypass strategy against coke by acquiring Quaker Oats Company which produced Gatorade brand of sports drink. Encirclement : Reliance Retail purchased its raw material at a higher price from the farmers and sold it to customers at a lower price vis--vis unorganized retailers. Guerilla: Go Airs short term ad-campaign against

Strategies for Market Followers

Follow the market leader Many advantages: Learn from the market leaders experience Copy or improve on the leaders offerings Strong profitability
Objective is to increase the profitability rather than

gaining market share. Specific strategies include price discounts, improved services, innovation etc. May resort to counterfeiting, cloning, Imitating and Adapting (especially in rural areas).

Strategies for Market Nicher

Smaller firms can avoid larger firms by targeting smaller markets or niches that are of little or no interest to the larger firms Good strategy for small firms with limited resources Offers high margins Specialization is key Should focus on multiple niches. e.g. Logitechmice achieved remarkable success by making different variation of computer mouse. For example separate mice for left and right handers, 3D mouse etc.

Reaction Patterns
The Laid Back Competitor - no quick or strong reaction,

because: It feels customers are loyal, milking the business, slow to notice or lacks funds to react The Selective Competitor - Reacts only to certain types of attack, eg price cuts. Reacts swiftly to demonstrate that this particular strategy is futile, and will not be tolerated. The Tiger /Tough Competitor: Reacts swiftly and strongly to any encroachment on its territory. The Stochastic/Unpredictable Competitor - No predictable reaction pattern

Competitive Intelligence System

A systematic and ethical program for gathering information

about competitors and general business trends to further your own companys goals
Value analysis helps firms to select competitors to attack and

to avoid Customers identify and rate attributes important in the purchase decision for the company and competition
Four Main Steps Setting Up the System Collecting the Data Evaluating and Analyzing the Data Disseminating Information and Responding

Designing The Competitive Intelligence System

Focus on Customer Value Analysis:

1. Identify the major attributes customers value.

2. Assess the quantitative importance of the different attributes.

3. Assess the companies and competitors performances on the different customer values against their rated importance. 4. Examine how customers in a specific segment rate the companys performance against a specific major competitor on an attribute-by-attribute basis.

Balancing Customer and Competitor Orientations

Competitor-centered It develops a fighter orientation: being on constant alert, watching for weaknesses in its competitors and its own position It determines its moves based on its competitors moves; does

Customer-centered

It is in a better position to identify new opportunities and set a strategy course that makes long-run sense It can decide which customer groups and emerging needs are the most important to serve, given its resources

Hero Hondas Frontal Attack on Market Leaders in motorcycle segments in late 1980s

Pepsis by pass strategy

L.Gs Flank Attack on market leader

Reliance Retails encirclement attack

Logitec Market Nicher