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8/8/2019 40601073 Competition Analysis Ppt by MY TEAM
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By
Anjali ChitaliaFarzana Sayyed
Pranali RaneNamita Salvi
&Pooja Sarkar
PRESENTATION ON
COMPETITION ANALYSIS
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COMPETITIVE STRATEGIES.
What is competitive strategy.
Objectives, consists of moves.
Five competitive strategies.
COMPETITION ANALYSIS.
What is competition analysis.
Purpose of competition analysis.
Competition Analysis can help you determine.
How can Competitive Analysis help to establish the product as a market
leader?
Competitive Analysis reveals about my products?
Competition Analysis helps to accomplish.
DEGREE AND NATURE OF COMPETITION.
Pure competition.
Oligopoly.
Monopoly.
Monopolistic competition.
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y Competition is a contest between individuals, groups,nations, animals, etc. for territory, a niche, or a location of resources. It arises whenever two or more parties strive for agoal which cannot be shared. Competition occurs naturally
between living organisms which co-exist in the sameenvironment. For example, animals compete over watersupplies, food, and mates, etc. Humans compete for water,food, and mates, though when these needs are met deeprivalries often arise over the pursuit of wealth, prestige, andfame. Business is often associated with competition as mostcompanies are in competition with at least one other firmover the same group of customers.
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yPure Competition- low barriers to entry, many choices, no business has dominance
- many companies competing and nobody has a significant
advantageexamples
small bars and restaurants
variety stores, convenience stores
nail salons, barbers
small grocery stores
doughnut shops
professional services (dentist, doctor, architects)
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yMonopoly
-one single large seller with no close competition and noalternate substitutesexamples
- the definition of a Monopoly, some say, is that it is bigger thanall other competition combined
software companies like Microsoft
local telephone in Canada (Bell)
Hydro services
LCBO
Canada Post
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y Monopolistic Competition- sellers feel they do have some competition
- there is one big company dominating the market with a few
medium or smaller sized companies
examples
(there used to be "pure competition" until Google
grew very big and became dominant) Walmart
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yWHAT IS COMPETITION ANALYSIS
Competitive Analysis is a process of gathering and
analyzing information about your competitors, their
practices,products, strengths and weaknesses and business
trends in order to assess your position in the market and
improve your products and marketing strategies.
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yWhat is the purpose of Competitive
Analysis?
In today's market, you must know what yourcompetitors are doing and what to do to stay ahead of thecompetition. Many businesses believe they are providing agood product to their customers, but do not have reliableinformation showing how customers perceive their productor how it compares to the competition.
A Competitive Analysis performed by an unbiased thirdparty is an invaluable tool because it can help you identify
ways to attract new customers, as well as keep the ones youhave satisfied with your products.
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yCompetitive Analysis can help
you determine
Strengths and weaknesses: How your product stacks upagainst the competition and in what areas they have an edge overyour product and in what areas your product is superior.
Identify your competition: Verify who your primary andsecondary competitors are.
Improvements: How and in what areas your product, processes,and practices must be improved to meet market demands or tostay ahead of the competition.
Marketing: What improvements you need to make in yourmarketing approach - you may want to highlight why your productis ahead of the competition, or the unique features that consumersdesire
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y
How can Competitive Analysis helpto establish my product as a marketleader?
Competitive Analysis gives you a realistic view of your competition. It also gives you the opportunity toidentify improvement in areas like manufacturingprocesses, customer services, and marketing claims. Itcan help you compare products prior to making yourmarketing and promotional decisions, thus saving you
both time and money.
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yWhat Competitive Analysis reveals
about my products?
What other products compete with yours ?
What advantages your products have over thecompetitor·s products ?
What disadvantages your products have whencompared to the competition ?
The readiness of a new product in the market
A realistic view of customers' perception of your product against the competition
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yCompetitive Analysis helps to
accomplish A realistic view of your competition. Foresee market changes and demands. Identify ways to attract customers from your
competitors. Discover opportunities for improvement in yourbusiness practices.
Identify necessary changes in your processes to meetmarket demands.
Identify necessary changes in your processes to reduce
costs.
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yWhat is competitive strategy.
Competitive strategy refers to how a
company competes in a particular business (note: overall strategy for diversified firms is
referred to as corporate strategy ). Competitive
strategy is concerned with how a company can
gain a competitive advantage through adistinctive way of competing.
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yObjectives, consists of moves
The objective of a competitive strategy is togenerate a competitive advantage, increase theloyalty of customers and beat competitors.
A competitive strategy is narrower in scope than abusiness strategy.
A competitive strategy consists of moves to Attract customers Withstand competitive pressures
Strengthen an organization·s market position
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y
Five competitive strategies.
Overall low-cost leadership strategy
Best cost provider strategyBroad differentiation strategyFocused low-cost strategyFocused differentiation strategy
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Overall Low-Cost Leadership Strategy
y Strive to be the overall low-cost provider in anindustry
y How to achieve overall low-cost leadershipScrutinize each cost activityManage each cost lower year after yearReengineer cost activities to reduce overall costsCut some cost activities out of the value chain
y Competitive strengths of a overall low-cost strategyOrganization in a better position to compete offensively on priceOrganization is better able to negotiate with large customers
Organization is able to use price as a defense against substitutesLow cost is a significant barrier to entryOrganization is more insulated from the power of suppliers
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When Does an Overall Low-Cost
Strategy Work the Best
y When price competition is a dominant competitive force
y The product is a ́ commodityµ
y
There are few ways to differentiate the producty Most customers have similar needs/requirements
y Customers incur low switching costs changing sellers
y Customers are large and have significant bargaining
power
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When Doesn·t an Overall Low-Cost
Strategy Work
When technological breakthroughs open cost
reductions for competitors, negating a low-cost
provider·s efficiency advantage
Competitors find it relatively easy and inexpensive toimitate the leader·s low cost methods
Low-cost leader focuses so much on cost reduction that
the organization fails to respond to
y Changes in customer requirements for quality andservice
y New product developments
y Reduced customer sensitivity to price
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Broad Differentiation Strategies
y Striving to build customer loyalty by differentiating an organization·s
products from competitors· productsy Keys to success include
Finding ways to differentiate to create value for customers that are not easily copied
Not spending more to differentiate than the price premium that can be charged
y A successful differential strategy allows an organization to
Set a premium price
Increase unit sales
Build brand loyalty
y Where to look for differentiation opportunities Supply chain
Research and development
Production activities
Marketing, sales and service activities
y Strengths of a Differentiation Strategyy Customers develop loyalty to the brand
y Brand loyalty acts as an entry barrier
y Organization is better able to fend off threats of substitute products because of brandloyalty
y Reduces bargaining power of large customers since other brands are less attractive
y Seller may be in a better position to resist efforts of suppliers to raise pricesMonday, November 01, 201020
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Pitfalls of a Broad Differentiation
Strategy
y Trying to differentiate on an unimportant product
feature that doesn·t result in providing more value to the
customer
yOver differentiating the product such that the productfeatures exceed the customers· needs
y Charging a price premium that buyers perceive as too
high
y Ignoring need to signal value
y Not identifying what customers consider valuable
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Best-Cost Provider Strategyy Striving to give customers more value for the money by
combining an emphasis on low cost with an emphasis onupscale differentiationCombines low-cost and differentiation
y The objective is to create superior value by meeting orbeating customer expectation on product attributes andbeating their price expectations
y Keys to successMatch close competitors on key product attributes and beat
them on cost
Expertise at incorporating upscale product attributes at a lowercost than competitors
Contain costs by providing customers a better product
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Advantages of Best-Cost Provider
Strategyy Competitive advantage comes from matching
close competitors on key product attributes and
beating them on price
y Most successful best-cost providers have skills
to simultaneously manage costs down and
product quality up
y Best-cost provider can often beat an overall low-
cost strategy and a broad differentiationstrategy where
Customer diversity makes product differentiation the
norm
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Focus Strategiesy Focus strategy based on low-costConcentrate on a narrow customer segment beating the
competition on lower cost
y Focus strategy based on differentiation
Offering niche customers a product customized to their needsy Overall objective of both focus strategies is to do a
better job of serving a niche target market thancompetitors
y Keys to successChoose a niche were customers have a distinctive preference,
unique needs or special requirementsDevelop a unique ability to serve the needs of a niche target
market
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What Makes a Niche Attractive?
y Large enough to be profitable
y Good growth potential
y Not critical to the success of major competitors
y Organization has the resources to effectively serve theniche
y Organization can defend itself against challengers
through a superior ability to serve the niche
y No competitors are focusing on the niche
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Strengths and Risks of Focus
Strategies
y Strengthsy Competitors don·t have the motivation to meet specialized needs of
the nichey Organization·s competitive advantage could be seen as a barrier to
entryy
Organization·s competitive advantage provides an obstacle forsubstitutes
y Organization·s ability to meet the needs of customers in the nichecan reduce the bargaining power of large niche buyers
y Risksy Broad differentiated competitorsmay find effective ways to enter
the nichey Niche customers· preferences may move toward the product
attributes desired by a larger market segment
y Profitability may be limited if too many competitors enter the niche
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