Competition Analysis and Strategy

Question 1

What are the types of Competitors

Answer 1

Direct competition, Subtitute competition, Budget Competition

Question 2

What is Substitute Competition

Answer 2

Rivalry between products that meet the same need in different ways, like tea vs. coffee.

Question 3

What is Budget Competition

Answer 3

Budget competition occurs when different products or services compete for the same portion of a consumer’s limited budget, even if they are unrelated. For example, a person may choose between buying new shoes or going to a concert because they can’t afford both.

Question 4

Competitor Myopia

Answer 4

Too Narrow of a scope when viewing competition

Question 5

What is a supplier based method to identify competition

Answer 5

The North American Classification System(Find competitors using the same suppliers or resources.)

Question 6

What are the Consumer/Demand methods?

Answer 6

Observed Consumer behavior(Cross-price elasticity, Brand Switching, Substitution in use) and Perceived Brand Similarity>

Question 7

What is Cross Price Elasticity?

Answer 7

Cross Price Elasticity: Measures how the demand for one product changes when the price of another product changes.

Positive: If the price of one product rises, demand for the other also rises (substitutes).
Negative: If the price of one product rises, demand for the other falls (complements).

Question 8

What does a positive price elasticity mean?

Answer 8

That they are competitors

Question 9

What is Brand switching Matrix

Answer 9

Brand Switching Matrix: A tool used to analyze how customers switch between different brands.

Rows: Represent the brand customers are switching from.

Columns: Represent the brand customers are switching to.

It helps identify patterns in customer behavior, showing which brands are gaining or losing customers.

Question 10

What is substitution in use

Answer 10

Which alternative would be purchased when a product is not available

Question 11

What are Porters Generic Strategies

Answer 11

Overall Cost leadership, Differentiation, and Focus.

Question 12

What is overall cost leadership?

Answer 12

Overall Cost Leadership: A strategy where a company aims to be the lowest-cost producer in its industry.

Focuses on reducing costs to offer products at a lower price than competitors.

Question 13

What is Differentiation?

Answer 13

Creating a highly differentiated product line and marketing program.

Question 14

What is focus?

Answer 14

Effort is focused on serving a few market segments

Question 15

What is non price competition?

Answer 15

Non-Price Competition is when companies compete using factors other than price, like quality, branding, customer service, or innovation. It focuses on differentiating products or services without lowering prices, often used in markets where price competition is limited

Question 16

Effects of price wars

Answer 16

Harmful to weaker firms, Negative product image, ignorance of non price factors

After weak competitors drop out price is increased

Question 17

Perceptual map types?

Answer 17

Attribute based and non attribute based

Question 18

What is the attribute based method

Answer 18

Choosing two attributes and measuring consumer perception of these attributes

Question 19

What are the non attribute based methods?

Answer 19

Multidimensional scaling, and Correspondence analysis

Question 20

What is multidimensional scaling?

Answer 20

Multidimensional Scaling (MDS) is a statistical technique used to visualize the similarity or dissimilarity between different products or brands. It places items in a spatial map, where the distance between them reflects how similar or different they are based on customer perceptions or preferences. The closer two items are on the map, the more similar they are considered to be

Question 21

What are the advantages and disadvantages

Answer 21

Advantages: Insights about perceptions, and shows competition from a consumers view.

Disadvantages: Need to infer the attribute levels, and needs a specific number of decisions.

Question 22

What is a contingency table

Answer 22

Shows number of dimensions used to distinguish objects and shows relative position of each objects and segments along these dimensions

Question 23

What are the advantages of a contingency table

Answer 23

Uses categorical data and can represent segments on a joint space map.

Question 24

What are the market strategies market-leaders use?

Answer 24

Expanding the total market, Defending the current market share, and expanding market share.

Question 25

What are the market challenger strategies?

Answer 25

Challenge the market leader and challenge firms of the same or smaller size

Question 26

What is second mover advantage?

Answer 26

It is a market challenger strategy where a company benefits from following a competitor or a leader into a market rather than being the first one. This can help the firm learn from the leaders mistakes.

Question 27

What is a frontal attack with market challenger strategies

Answer 27

Attacking the competitors strengths

Question 28

Indirect attack

Answer 28

Attacking a competitors weaknesses

Question 29

What are the market follower strategies

Answer 29

Following the market leader is a good one

Question 30

What is following the market leader?

Answer 30

Where a company learns, and comp/improves upon the leaders offerings.

Question 31

What is a market niche strategy

Answer 31

Specialization

Question 32

What is it when firm is not customer oriented or competition centered?

Answer 32

Product orientation

Question 33

What is it when a firm is customer centered but not competition centered?

Answer 33

Customer orientation

Question 34

What is it when a firm is not customer centered but they are competitor centered?

Answer 34

Competitor Orientation

Question 35

What is it when a firm is customer centered and Competitor oriented?

Answer 35

Market orientation.