Objectives
ObjectivesObjectives
Objectives
Identifying CompetitorsIdentifying Competitors Evaluating CompetitorsEvaluating Competitors
Competitive Intelligence SystemsCompetitive Intelligence Systems Competitive StrategiesCompetitive Strategies
Induce your competitors not to invest in
Induce your competitors not to invest in
those products, markets and services
those products, markets and services
where you expect to invest the most …
where you expect to invest the most …
that is the fundamental rule of strategy.
that is the fundamental rule of strategy.
Bruce Henderson, Founder of BCGBruce Henderson, Founder of BCG
There is nothing more exhilarating than
There is nothing more exhilarating than
to be shot at without result.
to be shot at without result.
Five Forces Determining Segment
Five Forces Determining Segment
Structural Attractiveness
Structural Attractiveness
Five Forces Determining Segment Five Forces Determining Segment
Structural Attractiveness Structural Attractiveness
Potential Entrants (Threat of
Mobility)
Potential Entrants (Threat of
Mobility)
Buyers
(Buyer power)
Substitutes (Threats of substitutes) Suppliers
(Supplier power)Suppliers
Barriers and Profitability
Barriers and ProfitabilityBarriers and Profitability
Barriers and Profitability
Industry Competition
Industry CompetitionIndustry Competition
Industry Competition
Number of Sellers - Degree of Number of Sellers - Degree of
Differentiation
Differentiation
Entry, Mobility, Exit barriersEntry, Mobility, Exit barriers Cost StructureCost Structure
©2000 Prentice Hall High High Low High Low Low Q u a lit y Q u a lit y Vertical Integration Vertical Integration
Strategic Groups in the Major Strategic Groups in the Major
Appliance Industry Appliance Industry
Strategic Groups in the Major
Strategic Groups in the Major
Appliance Industry
Appliance Industry
Group A
•Narrow line
•Lower mfg. cost
•Very high service
•High price
Group D •Broad line
•Medium mfg. cost
•Low service
•Low price
Group C
•Moderate line
•Medium mfg. cost
•Medium service
•Medium price
Group B •Full line
•Low mfg. cost
•Good service
Analyzing Competitors
Analyzing CompetitorsAnalyzing Competitors
Analyzing Competitors
Competitor Competitor
Actions Actions
Objectives
Objectives
Strengths &
Strengths &
Weaknesses
Weaknesses
Reaction
Reaction
Patterns
Patterns
Strategies
Competitor’s Expansion
Competitor’s Expansion
Plans
Plans
Competitor’s Expansion
Competitor’s Expansion
Plans
Plans
Markets
P
ro
d
u
ct
s
Individual Users
Commercial
& Industrial Educational
Personal Computers
Hardware Accessories
Software
Hypothetical Market
Hypothetical Market
Structure & Strategies
Structure & Strategies Hypothetical Market
Hypothetical Market
Structure & Strategies
Structure & Strategies
40%
Market leader
30%
Market challenger
20%
Market follower
Expand Market
Defend Market Share Expand Market Share
Attack leader
Status quo Imitate
10%
Market nicher
Defense Strategies
Defense StrategiesDefense Strategies
Defense Strategies
Attacker
Attacker
(3)
(3) PreemptivePreemptive
defense
defense
(4)
(4) Counter-
Counter-offensive offensive defense defense Defender (1) (1) Position Position defense defense (5) Mobile defense
(2) Flank defense
(2) Flank defense
(6) Contraction
(6) Contraction
defense
Optimal Market Share
Optimal Market ShareOptimal Market Share
Optimal Market Share
P
ro
f
ta
b
ili
ty
Market share
0% 25% 50% 75% 100%
Attack Strategies
Attack StrategiesAttack Strategies
Attack Strategies
Attacker
Defender
(3) Encirclement attack (4) Bypass attack
(2) Flank attack
Specific Attack Strategies
Specific Attack StrategiesSpecific Attack Strategies
Specific Attack Strategies
Price-discountPrice-discount Cheaper goodsCheaper goods Prestige goodsPrestige goods
Product proliferationProduct proliferation Product innovationProduct innovation Improved servicesImproved services
Distribution innovationDistribution innovation
“
““Nichemanship”Nichemanship”
“Nichemanship”Nichemanship”
End-user specialistEnd-user specialist
Vertical-level specialistVertical-level specialist Customer-size specialistCustomer-size specialist
Specific-customer specialistSpecific-customer specialist Geographic specialistGeographic specialist
Product or product-line specialistProduct or product-line specialist Product-feature specialistProduct-feature specialist
Job-shop specialistJob-shop specialist
Quality-price specialistQuality-price specialist Service specialistService specialist
Balance
BalanceBalance
Balance
Competition Customer
+ Fighter orientation + Alert
+ Exploit weaknesses - Reactive
+ ID opportunities + Long-run profit
Review
ReviewReview
Review
Identifying CompetitorsIdentifying Competitors Evaluating CompetitorsEvaluating Competitors
Competitive Intelligence SystemsCompetitive Intelligence Systems Competitive StrategiesCompetitive Strategies
