Page 41 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes So, the competitor analysis is the second phase of external analysis, in order to gain insights that
will influence the product-market investment decision. The analysis is focused on identifying
threats, opportunities or strategic uncertainties created by emerging or potential competitor
moves. Competitor analysis starts with identifying current and potential competitors. After
competitors are identified, the task is to understand them and their strategies, i.e., to analyse
their strengths and weaknesses and strategic groups of competitors.

Who are the Competitors?

1. Against whom do we usually compete?
2. Who are our most intense competitors?

3. Who are the makers of the substitute products?
4. Who are the potential competitive entrants?
5. What can be done to discourage them?

Evaluating the Competitors

1. What are their objectives and strategies?
2. What are their entry and exit barriers?

3. What is their cost structure?
4. Do they have cost advantage or disadvantage?
5. What are their strengths and weaknesses?
6. What are their assets and competencies?

Understanding the Competitors

To gain an understanding of the competitors, it is useful to analyse them on the basis of several
dimensions, e.g., their size, growth and profitability, their image and positioning strategy, their
level of commitment. It is useful to consider the characteristics of successful and unsuccessful
businesses by studying data relating to key customer motivation, large cost components, mobility
barriers, and value chain. Information on competitors can be obtained from market research
and a variety of other sources such as trade magazines, trade sources, customers and suppliers.

2.2.4 Market Analysis

“Imaging the future may be more important than analysing the past. I daresay companies today
are not resource-bound, they are imagination-bound”, says, C.K. Prahalad, University of Michigan.

Market analysis builds on customer and competitor analysis, its objective being to determine
the market response to current and potential participants and also to understand the dynamics
of the market.

Market Analysis—An Overview

Market Analysis is generally done on the following dimensions:
1. Actual and potential market size: Important sub-markets, their size; the potential market
includes the usage gap.

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