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Analysing Competitors and Creating
a Competitive Advantage
Potential entrants
Suppliers Buyers
Substitutes
Industrycompetitors
Rivalry amongexisting firms
Bargaining
Power
Bargaining
Power
Threat fromnew entrants
Threat ofsubstituteproducts
The Porter model of competitive Industry structure
Strategic position
Competitor analysis1. Who are our competitors?
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrust?
4. What are their strategies?
5. What are their response patterns?
Competitor
analysis seeks
to answer five
key questions
1. Who are our competitors?
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrust?
4. What are their strategies?
5. What are their response patterns?
• Product form• Product substitutes• Generics• New entries
Competitor analysis•Identify competitors
1. Who are our competitors?
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrust?
4. What are their strategies?
5. What are their response patterns?
• Financial• Technical• Managerial• Marketing assets• Strengths and
weaknesses
Competitor analysis
•Audit competitor capabilities
1. Who are our competitors?
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrust?
4. What are their strategies?
5. What are their response patterns?
• Build• Hold• Harvest• Growth directions
Competitor analysis
•Infer competitor objectives and strategic thrust
1. Who are our competitors?
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrust?
4. What are their strategies?
5. What are their response patterns?
• Target segments• Differential advantages• Competitive scope• Cost leadership
Competitor analysis
•Deduce competitor strategies
1. Who are our competitors?
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrust?
4. What are their strategies?
5. What are their response patterns?
• Retaliatory• Complacent• Hemmed-in• Selective• Unpredictable
Competitor analysis
•Estimate competitor response patterns
Competitor identification
Product form competitors• Technically similar products
Product substitutes• Technically dissimilar products
Generic competitors• Products that solve the problem or
eliminate it in a dissimilar way
Potential new entrants• With technically similar products• With technically dissimilar products
The competitive arena
Company capability profilesOur company Competitor 1 Competitor 2Key success factor
Innovativeness
Financial strength
Technical assistance to customers
Product quality
Well-qualified workforce
Access to international distribution channels
1 2 3 4 5
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Competitive Strategy Options
Sources of competitive advantage
• Superior skills.
• Superior resources.
• Core competences.
• Value chain.
Grolsch
Grolsch’s competitive advantage lies in its long history and core competence in the brewing industry
The value chain
Creating a differential advantage
Differentialadvantage
Product
PromotionDistribution
Price
Singapore Airlines
Singapore Airlines
differentiates by offering
exceptional value
Cost driversEconomies of scale
Capacity utilisation
Interrelationships
Timing
Location
Institutional factors
Learning
Linkages
Integration
Policy decisions
Costs
