Process of analysing competition :
Analysing competitors calls for considering a lot of aspects. A company needs to know everything about its competitors. Note that analysing competitors is not incidental task, a manager must know about his competitors on a continuous basis. So, it must develop a system to facilitate the task on regular basis.
Process of analysing competitors begins with knowing who our competitors are. A company can easily identify its competitors. For example, Coca-Cola knows that Pepsi-Cola is its main competitor
Basically there are four levels of competition:
(1) Brand competition, in which companies offer similar products and services to same customers at similar prices,
(2) Industry competition, in which all companies makes similar products or class of products,
(3) Form competition in which, companies produce such products that offer the same services, and
(4) Generic competition, in which companies are competing for the same consumer rupee.
Major Competitors:
But, more meaningfully, we can identify two major types of competitors, industry concept of competitors and market concept of competitors.
Industry Concept Competitors:
Competitors deal with industrial products. On the basis of production process, number of sellers and degree of differentiation, entry and mobility barriers, exit and shrinkage barriers, cost structure, degree of vertical integration, and degree of globalisation, there are different industries in which a number of companies operate.
Market Concept of Competitors:
They deal with consumer products. It indicates competitors trying to satisfy the same customers’ needs. It includes the companies offering the products that can satisfy particular need of the same segments.
In fact, meaningfully identification of competitors consists of liking industry analysis with market analysis.
It involves:
(1) Studying their areas of operations,
(2) Identifying the customer needs they are trying to satisfy,
(3) Finding the territories in which they are selling the products,
Clearly, effectiveness of competitors’ strategies in achieving objectives depends on resources and capabilities. To assess competitors’ strengths and weaknesses, a firm must gather data on key criteria.
The last but much conclusive step of competition analysis process is to balance customer- orientation and competitor-orientation. A company must watch every movement of its competitors to grow and/or safeguard its interest. But, it should not be so competitor-centered that it loses its customer focus. It must maintain a balance between customer and competitor orientation.
Analysing competitors calls for considering a lot of aspects. A company needs to know everything about its competitors. Note that analysing competitors is not incidental task, a manager must know about his competitors on a continuous basis. So, it must develop a system to facilitate the task on regular basis.
Process of analysing competitors begins with knowing who our competitors are. A company can easily identify its competitors. For example, Coca-Cola knows that Pepsi-Cola is its main competitor
Basically there are four levels of competition:
(1) Brand competition, in which companies offer similar products and services to same customers at similar prices,
(2) Industry competition, in which all companies makes similar products or class of products,
(3) Form competition in which, companies produce such products that offer the same services, and
(4) Generic competition, in which companies are competing for the same consumer rupee.
Major Competitors:
But, more meaningfully, we can identify two major types of competitors, industry concept of competitors and market concept of competitors.
Industry Concept Competitors:
Competitors deal with industrial products. On the basis of production process, number of sellers and degree of differentiation, entry and mobility barriers, exit and shrinkage barriers, cost structure, degree of vertical integration, and degree of globalisation, there are different industries in which a number of companies operate.
Market Concept of Competitors:
They deal with consumer products. It indicates competitors trying to satisfy the same customers’ needs. It includes the companies offering the products that can satisfy particular need of the same segments.
In fact, meaningfully identification of competitors consists of liking industry analysis with market analysis.
It involves:
(1) Studying their areas of operations,
(2) Identifying the customer needs they are trying to satisfy,
(3) Finding the territories in which they are selling the products,
Clearly, effectiveness of competitors’ strategies in achieving objectives depends on resources and capabilities. To assess competitors’ strengths and weaknesses, a firm must gather data on key criteria.
The last but much conclusive step of competition analysis process is to balance customer- orientation and competitor-orientation. A company must watch every movement of its competitors to grow and/or safeguard its interest. But, it should not be so competitor-centered that it loses its customer focus. It must maintain a balance between customer and competitor orientation.
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