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Marketing > Environmental scanning - competitor analysis - Lecture 3 > Flashcards

Environmental scanning - competitor analysis - Lecture 3 Flashcards

1
Q

how can competitive advantage be done

A

by offering lower prices than competitors for similar products and services or by providing more benefits that justify higher prices

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2
Q

competitor analysis

A

systematic attempt to identify and understand the key elements of a competitor strategy (porter’s 5 forces)

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3
Q

what are Porter’s 5 forces *

A

threat of new entrants, bargaining power of customers, threat of substitute products, bargaining power of suppliers, rivalry among competitors

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4
Q

what actually is Porter’s 5 forces (not what they are)

A

the model is a framework for analysing the nature of competition within an industry

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5
Q

example of threat of substitute

A

computer over typewriter

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6
Q

threat of new entry features (Porter’s 5 forces)

A

time and cost of entry,
specialist knowledge,
economies of scale,
barriers to entry

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7
Q

power of suppliers features (Porter’s 5 forces)

A

number of suppliers,
size of suppliers,
uniqueness of service,
ability to substitute

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8
Q

bargaining power of customers features (Porter’s 5 forces)

A 
number of customers,
size of each order,
difference between competitors,
price sensitivity,
ability to substitute
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9
Q

rivalry among competitors features (Porter’s 5 forces)

A

number of competitors,
quality differences,
switching costs,
customer loyalty

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10
Q

critique of Porter’s 5 forces *

A

assumes classic perfect market,
best applicable for analysis of simple market structures,
assumes relatively static market structures,
based on idea of competition, created before internet/globalisation/deregulation etc

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11
Q

marketing myopia d

A

situation where a company has a narrow-minded marketing approach and focuses mainly on only one aspect out of many possible marketing attributes eg focusing just on quality and not on the actual demand of the customer (failing to recognise threats from other industries such as road-based travel being a competitor of railways in 1930s)

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12
Q

3 steps necessary carrying out a competitor analysis

A

identify company’s competitors,
assessing competitor’s objectives strategies strengths and weaknesses and reaction patterns,
selecting which competitors to attack or avoid

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13
Q

what is a strategic group or cluster

A

group of firms in an industry following the same or similar strategy in a given target market

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14
Q

Porter’s generic competitive strategies

A

cost leadership, differentiation (perception of uniqueness), focus (niche market)

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15
Q

what are the competitive positions in the market

A

market leader, market follower, market challenger, market nicher

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16
Q

example of market challenger

A

pepsi

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17
Q

example of market leader

A

microsoft, mcdonalds

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18
Q

example of market follower

A

own brand beans and zara

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19
Q

example of market nicher

A

fat lad at the back

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20
Q

market leader strategies

A

try to continue winning greater share of the market from smaller rivals, or try to expand the total market (finding new uses or encouraging greater usage)

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21
Q

market challenger strategies

A

can attack market leaders, or can attack smaller market followers by out-competing them or by taking them over

22
Q

market follower strategies

A

allow market leaders to make most of the investment, and then follow on to pick up any spare segments (which might have been bypassed by the leader)

23
Q

market nicher strategies

A

operate on a low-volume, high margin basis

24
Q

examples of market nichers

A

organic foods, asian tv, retro style (35mm cameras)

25
Q

what are market nichers not trying to do

A

take over the whole market, they are catering for a small proportion of the market

26
Q

example of threat of new entrants supermarkets (Porter’s 5 forces)

A

Lidl and Aldi to ‘the big four’

27
Q

example of bargaining power of customers supermarkets (Porter’s 5 forces)

A

customers have choice of which supermarket to go too

28
Q

example of threat of substitute products BP (Porter’s 5 forces)

A

tesla making electric powered cars no longer need petrol

29
Q

example of bargaining power of suppliers supermarket (Porter’s 5 forces)

A

dairy farmers and suppliers pressing for higher wages

30
Q

example of rivalry among competitors supermarkets (Porter’s 5 forces)

A

percentage market share of each of the supermarkets

31
Q

when is the power of suppliers likely to be high (Porter’s 5 forces)

A

power of suppliers likely to be high if the number of suppliers is small and/or the materials, components and services they offer are in short supply

32
Q

example of a supplier with high bargaining power (Porter’s 5 forces)

A

owners of patented technology such as new medicine that is patented for 20 years

33
Q

when is the threat of new entrants greatest (Porter’s 5 forces)

A

when there are low barriers to entry

34
Q

are new entrants from similar markets

A

new entrants may already be active in a similar market sector but in another geographic market or new entrants may arrive from outside the industry

35
Q

how can a company prevent against rivalry among competitors

A

if a company is established as the dominant technology or brand before the industry matures then they will have a strong position

36
Q

when trying to identify a company’s competitors should you just be looking at companies in the same industry

A

no, threats could come from any related sector (railway companies in 1930s saw main competitors as other railways so overlooked most serious competition of road-based transport)

37
Q

what are direct competitors (Porter’s 5 forces)

A

similar in form and satisfy customer’s needs in a similar way

38
Q

what are indirect competitors (Porter’s 5 forces)

A

may appear different in form, but satisfy a fundamental similar need

39
Q

what do you ask once you have identified the main competitors

A

what does each competitor seek in the marketplace,

what drives each competitor’s behaviour

40
Q

do companies always have the same emphasis on short term versus long term profits

A

no companies differ in the emphasis they put on short term versus long term profits, and some competitors are orientated towards satisfying rather than maximising profits

41
Q

what does knowing a competitors objectives reveal

A

reveals whether it is satisfied with its current situation and how it might react to competitive actions

42
Q

what is an example of a strategic group or cluster

A

waitrose and m and s producing higher range groceries at a premium price

43
Q

are strategic groups completely independent from each other

A

no there is also rivalry among groups as strategic groups may appeal to overlapping customer segments

44
Q

example of strategic groups mixing

A

waitrose’s essential waitrose product line challenge sainsburys taste the difference

45
Q

how does a company gather data on competitor’s business

A

through secondary data, personal experience and hearsay

46
Q

how can a company know how another company will react to an assault

A

by seeing previous reactions for example might react strongly to price cuts but not to advertising increases as they believe these to be less threatening

47
Q

what does cost leadership involve (porter’s 3 generic competitive strategies)

A

having a cost advantage over competitors

48
Q

what does differentiation involve (porter’s 3 generic competitive strategies)

A

creation of product/service that is perceived as being unique (when achieved extremely effective strategy for defending market position

49
Q

what does focus involve (porter’s 3 generic competitive strategies)

A

deliberately selecting, focusing on a narrow group of customers rather than the whole market

50
Q

what does retaining a position in the market involve

A

requires firms to attack competitors or defend themselves from attack

51
Q

why is trying to expand the total market a better option for a market leader than trying to continue to win a greater market share

A

easier to attract more customers than to steal from competitors, less likely to attract the attention of monopoly regulators

52
Q

example of market follower

A

zara and other clothes brands

Marketing (17 decks)

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