5-1 McGraw-Hill/Irwin Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 5 Competitor Analysis 5-3 Competitor Analysis System What are they going to do? Differential competitor advantage analysis i.e. Who has the competitive product advantage? Key questions: -Who are they? - What are the competing product features? -What do they want? -What is their current strategy? Primary data Secondary data 5-4 Secondary Sources of Competitor Information Internal Sources Local Newspapers Annual Reports Patent Filings 10Ks Business Press Government Electronic Databases News Releases Trade Associations Promotional Literature InternetTrade PressConsultants Customer Communications Secondary data 5-5 Primary Sources of Competitor Information Sales Force Investment Bankers SuppliersCustomersEmployees Consultants/ Specialized Firms Primary Data 5-6 Other Sources of Competitor Information Trade Shows Help-Wanted Advertisements Plant Tours Reverse Engineering Monitoring Test Markets Hiring Key Employees Primary Data 5-7 Sources with Ethical Considerations Aerial reconnaissance Buying/stealing trash Bribing printers Running phony want ads Snooping on airplanes 5-8 Product Features Matrix 5-9 Assessing Competitors Strategies Marketing strategy Comparing value chains Marketing mix Pricing Promotion Distribution Product/Service capabilities 5-10 Value Chain Service Service Firm Infrastructure Firm Infrastructure Human Resource Management Technology Development Procurement Marketin g and Sales Operations Outbound Logistics Inbound Logistics Margin Support Activities Primary Activities 5-11 Criteria to Assess Technological Strategy 1.Technology selection or specialization 2.Level of competence 3.Sources of capability: internal versus external 4.R&D investment level 5.Competitive timing: initiate versus respond 6.R&D organization and policies 5-12 Competitor Information to Collect Ability to conceive and design Ability to produce Ability to market Ability to finance Ability to manage 5-13 Differential Competitor Advantage Analysis 5-14 A Competitive Conjecture Process Customer response We lower our price Our unit sales Their expected price Our profit Their price reaction Customer response Our unit salesOur profit Our total outcome Second period First period Should we cut price? 5-15 Energy Bars: Competitor Feature/Strategy Matrix 5-16 Energy Bars: Differential Competitor Analysis 5-17 Energy Bars: Differential Competitor Analysis (cont.) 5-18 Energy Bars: Current & Future Strategy Matrix 5-19 PDA Product Features Matrix 5-20 Comparison of Competitor Resources: PDAs 5-21 Comparison of Competitor Resources: PDAs (cont.)