Chapter 3: Industry-, Competition- And Distribution Analysis Flashcards
Porter’s 5-forces model
A framework used to analyse an industry’s profitability and the attractiveness of a certain market
What are Porter’s 5 Forces?
1) Threat of New Entrants
2) Supplier Power
3) Buyer Power
4) Threat of Substitutes
5) Industry Rivalry
What is a potential 6th force for Porters 5 Forces model?
_ The Threat of Complementary Products
Product Life Cycle (PLC)
A concept that describes the stages a product goes through from its introduction to the market until it’s eventual decline or withdrawal
Stages in Product Life Cycle
1) Introduction Stage
2) Growth Stage
3) Maturity Stage
4) Decline Stage
Introduction Stage of Product Life Cycle
- Slow Sales Growth
- Little or no profit
- High distribution and promotion expense
Growth Stage of Product Life Cycle
- Sales increase
- New competitors enter the market
- Price stability or decline to increase volume
- Consumer education
- Profits increase
- Economies of scale
Maturity Stage of Product Life Cycle
- Slowdown in sales
- Many suppliers
- Substitute products
- Overcapacity leads to competition
- Increased promotion and R&D to support sales and profits
Decline Stage of Product Life Cycle
- Maintain the product
- Harvest the product
- Drop the product
Product Adoption Curve
A model that describes how different groups of people adopt new products/services over time
Stages in Product Adoption Curve
1) Innovators
2) Early Adopters
3) Early Majority
4) Late Majority
5) Laggards
Innovators in Product Adoption Curve
- 2,5%
- First to adopt new product/technology
- Typically well-educated
- Helps introduce and test new products in the market
Early Adopters in Product Adoption Curve
- 2,5% - 16%
- Opinion leaders / Influencers
- Help spread word about product and influence majority of consumers
- Crucial for gaining broader market acceptance
Early Majority in Product Adoption Curve
- 16% - 50%
- Adopts new product slightly ahead of average person
- Cautious
- First significant wave of adoption leading to widespread product acceptance
Late Majority in Product Adoption Curve
- 50% - 84%
- Skeptical & only adopt after majority have done so
- Typically more price sensitive & conservative in buying behaviour
- Final phase of widespread adoption
- Peak market penetration
Laggards in Product Adoption Curve
- Last to adopt a new product
- Prefers traditional products, skeptical of innovations
- Only adopt product when it becomes unavoidable or the standard in the market
Competition-Based Competitor Identification
A competitor identification method in which the management of the company recognises the direct or indirect competition and categorises them in specific strategic groups
What are some examples of specific strategic groups within Competition-Based Competitor Identification?
- Top segment niche brands
- Large A-brands
- Smaller A & B brands
- Retail brands
- ‘No Name’ brands
Customer-Based Competitor Identification
A method of competitor identification based on the choices and preferences of the customers
Which competitor identification method is used the most?
Competition-Based Competitor Identification
Marketing Myopia
Where a company focuses more on it’s products and competitions than on the needs and wants of the customer
What are the most essential things to know when analysing a company?
- Competitor’s goals
- Competitor’s strategies
- Competitor’s success factors
Distribution Analysis
The process of examining and evaluating the channels through which a product or service reaches its end customers.
What needs to be analysed in a Distribution Analysis?
- Distribution intensity (% of market we are serving?)
- Distribution Channel Choice (Choice of channel to reach this %)
- Distribution Channel management (How do we manage the channels?)
Traditional retail (brick-and-mortar)
Offline purchasing & Offline orientation
Showrooming (omni-channel)
Online purchasing & Offline orientation
Online retail (pure-play)
Online purchasing & Online orientation
Webrooming (omni-channel)
Offline purchasing & Online orientation
What is it called when a company operates through online purchasing & offline orientation?
Showrooming (omni-channel)
What is it called when a company operates through online purchasing & online orientation?
Online retail (pure-play)
What is it called when a company operates through offline purchasing & offline orientation?
Traditional retail (brick-and-mortar)
What is it called when a company operates through offline purchasing & online orientation?
Webrooming (omni-channel)
The Disintermediation Trend
A trend where traditional intermediaties (wholesalers, brokers or retailers) are removed/bypassed from the supply chain, allowing producers or service providers to sell directly to consumers
Micro level of Distribution Analysis
At the level of the individual distributors
- Distributor strategy
- Relationship & sales management
- Importance of distributor
- Importance of brand
- Does the distributor become more and more a competitor?
