Ch 3 Flashcards
What is the purpose of competitor analysis?
- Gather insights that will influence the development of successful business strategies
- Focus on the identification of threats, opportunities or strategic uncertainties created by emerging or potential competitor moves, weaknesses or strengths
What ask to determine who your competitors are?
- Who do we usually compete against?
- Who is our most most/least intense competitor?
- Makers of substitute products? (what would customers defer to - pos not even a simlar prodict)
- Who are potential competitive entrants? What are barriers to entry? Can they be discouraged?
- Can we group these competitors into strategic groups based upon their assets/competencies/strategies?
What are the types of competition?
ex: competing with new batman movie
- brand competition = similar features and benefits to your product (spiderman movie)
- product comp = same class of product but different features (online streaming service)
- generic comp = markets diff product but solves same need/want (concert, sport event - viewing something)
- total budget comp = compete for section of customer’s wallet/spending (some go to rent, gas, food, entertainment, etc.) (read book, go to mall - all entertainment of some sort)
What are the different approaches to identify competitors?
1) customer based approaches
- product/brand-use associations = find associations with certain contexts, applications, etc.
- indirect competitors = what customer might also consider, esp bc their priorities always changing etc.
2) strategic group approach
= see orgs that:
a) Pursue similar competitive strategies
b) Have similar characteristics
c) Have similar assets & competencies
Where could potential competitors come from?
- Market expansion (new entrants)
- Product expansion (existing companies doing things on YOUR TURF)
- Backward integration (Apple keeps buying up its supply chain)
- Forward integration (Cara used to supply plane food but now just buying actual existing restos)
- The purchase of assets & competencies
What do to understand competitors and their strategy? (both current and future) What is an example of this? What is identified in this analysis process?
- what are their strengths, weaknesses, actual strategies, (and opportunities and threats related)
- translate those into insights (if it is/was a weakness, they probably won’t really focus on that side of things!)
ex: Ikea has observed other companies eating their own supply chains, and seen what strengths others have over them (assembly services, etc.) so Ikea has started incorporating that stuff, acquiring other companies ot make it all happen
Identified often are strategic uncertainties that need to be monitored (ex: plan for if they do this, we do this, or if this happens, we will…)
What are the 6 aspects of competitor actions to consider when doing a competitor analysis?
1) strengths, weaknesses, current and past strategies = if they suck at something probably not gonna pursue it, if it has worked before, probably gonna grow it
2) size, profitability, and growth
3) Image and positioning = what comes to mind? if they have a strong association or strong stance on certain topic, that is hard to beat/encroach on
4) objectives and commitments = goals on website, etc., and if they have a parent company that would impact strategic choices
5) organization and culture = who leading the company (their values, style trickle down), certain focus will stick
6) cost structure and exit barriers = ownership of property/equip/even workers, or other barriers that demonstrate commitment (don’t want to leave as the founder, dont want to screw over employees by pulling out of the indistry)
What are the 4 things to check when looking to identify biz assets and competencies?
1) customer motivations
2) drivers of biz success/failure
3) critical value added components
4) industry mobility barriers
What are some potential strengths and weaknesses an orgnaization may have?
- innovation (patents, technical product superiority, etc.)
- marketing (customer service, reputation, differentiation, etc.)
- maufacturing and operations (effective/efficient, vertical int., etc.)
- finance (access to capital - investors, own operations, etc.)
- management (biz knowledge, culture, etc.)
- customer base (loyal, size, etc)
What is a Blue Ocean strategy? What are the steps to assess it?
= Firms develop strategic focus by developing a strategy that stands apart from the competition
1) Strategy canvas - visually identify strategic focus compared to competitors
2) Four Actions Framework - reorient firm’s strategic focus away from the competition
What does a strategy canvas look like?
bottom (x axis) = all the factors that matter in the industry (what customers look for and get already)
side (y axis) = level of offering of those factors by each org
data points = form into a value curve that represents and demonstrates the relative performance of the org compared to competitors
What are the parts of the four actions framework?
1) reduce = which factors need be shrunk below what is industry standard?
2) eliminate = stuff maybe taken for granted in industry to just GET OUTTA THERE (ex: plane pillow and blanket)
3) raise = which factors should be increased above industry standard?
4) create = what should be created that isnt offered in the industry? (ex: plane wifi hotspots)
What are some sources of competitive advantage? What are the big 3 we talked about in class?
big 3:
- operational excellence (Walmart - low cost operations,
efficiency, dependable product supply)
- customer intimacy (Amazon - deliver customer needs VERY WELL, problem solvers)
- product leadership (Tesla - excellent marketing, lotsa research, always changing and adapting)
Others
- relational things
- legal things (patents, etc.)
- organizational (culture, etc.)
- human resources
What are the characteristics of an SCA? Are they only based on reality?
- from internal or external sources
- specific benefit to customers (value)
- inimitable, rare, and organized
Should be based on real things, but can be influenced by perceptions (ex: Samsung probably has Apple beat, but they have better marketing)
What are potential directions for strategic focus?
1) Aggressive (many internal strengths/many external opportunities)
2) Diversification (many internal strengths/many external threats)
3) Turnaround (many internal weaknesses/many external opportunities)
4) Defensive (many internal weaknesses/external threats)
