Competitive Analysis and Marketing Strategy: A Review

1
Competitive Analysis and Marketing Strategy A
Review
2
What we have done so far ...

• Mission, objectives and goals
• Portfolio models - BCG, GE
• Marketing warfare -
• different strategies for leaders, followers,
  flankers, and guerillas
• Segmentation -
• Cluster analysis, CHAID
• Logit
• Positioning - Maps

3
Structural Analysis of Industries Michael Porter
THREAT OF NEW ENTRANTS
BARGAINING POWER OF BUYERS
BARGAINING POWER OF SUPPLIERS
RIVALRY AMONG COMPETITORS
THREAT OF SUBSTITUTES
4
Barriers to Entry

• Economies of Scale
• Product Differentiation
• Capital Requirements
• Switching Costs
• Access to Distribution Channels
• Cost Disadvantages Independent of Scale
• Government Policy
• Experience Curves
• Expected Retaliation

5
Factors Affecting Rivalry Among Existing
Competitors

• Numerous or Equally Balanced Competitors
• Slow Industry Growth
• High Fixed or Storage Costs
• Need to operate at capacity Price cutting
• Lack of Differentiation
• Capacity Augmented in Large Increments
• Diverse Competitors
• High Strategic Stakes
• High Exit Barriers

6
Bargaining Power of Buyers is High When....

• Purchasing is concentrated or is in large volumes
  relative to sellers sales
• The product represents a large proportion of
  buyers costs
• There is little differentiation or there are low
  switching costs
• Backward integration is a credible threat
• Product performance / quality is unimportant to
  buyers performance

7
Bargaining Power of Suppliers is High When....

• Supplying industry is dominated by a few firms
  and is more concentrated than the customer
  industry
• The product has few substitutes
• The customer industry is not important to the
  supplier
• The supplier product is an important input, is
  differentiated, or has high switching costs
• The supplier group poses a credible threat of
  forward integration

8
Barriers and Profitability
Low, stable returns
Low, risky returns
Low
ENTRY BARRIERS
High, stable returns
High, risky returns
High
Low
High
EXIT BARRIERS