Objectives

Identifying

Competitors
Evaluating Competitors
Competitive Intelligence Systems
Competitive Strategies
Customer vs. Competitor Orientation

2000 Prentice Hall

Induce your competitors not to invest in

those products, markets and services
where you expect to invest the most
that is the fundamental rule of strategy.
Bruce Henderson, Founder of BCG

There is nothing more exhilarating than

to be shot at without result.
Winston Churchill
2000 Prentice Hall

Five Forces Determining Segment

Structural Attractiveness
Potential Entrants
(Threat of
Mobility)

Suppliers
(Supplier power)

2000 Prentice Hall

Industry
Competitors
(Segment rivalry)

Substitutes
(Threats of
substitutes)

Buyers
(Buyer power)

Barriers and Profitability

Exit barriers
Entry Barriers

Low

High

Low

Low, stable
returns

Low, risky
returns

High

High, stable
returns

High, risky
returns

2000 Prentice Hall

Industry Competition
Number

of Sellers - Degree of
Differentiation
Entry, Mobility, Exit barriers
Cost Structure
Degree of Vertical Integration
Degree of Globalization

2000 Prentice Hall

Strategic Groups in the Major

Appliance Industry
Quality

A
High Group
Narrow line

Lower mfg. cost

Very high service
High price
Group B
Full line
Low mfg. cost
Good service
Medium price

Low

Group C
Moderate line
Medium mfg. cost
Medium service
Medium price
Group D
Broad line
Medium mfg. cost
Low service
Low price

High
2000 Prentice Hall

Low

Vertical Integration

Analyzing Competitors
Objectives
Strategies
Competitor
Actions

Reaction
Patterns

2000 Prentice Hall

Strengths &
Weaknesses

Competitors Expansion
Plans

Products

Individual
Users
Personal
Computers
Hardware
Accessories
Software

2000 Prentice Hall

Dell

Markets

Commercial
& Industrial Educational

Hypothetical Market
Structure & Strategies
Market
leader

40%
Expand Market
Defend Market Share
Expand Market Share
2000 Prentice Hall

Market
challenger

30%
Attack leader
Status quo

Market
nicher
Market
follower

20%
Imitate

10%
Specialize

Defense Strategies
(2) Flank defense

Attacker

(3) Preemptive
defense
(4) Counteroffensive
defense

(1)
Position
defense (6) Contraction
defense
Defender
(5)
Mobile
defense

2000 Prentice Hall

Optimal Market Share

Profitability

Optimal market share

0%

2000 Prentice Hall

25%

50%

75%

Market share

100%

Attack Strategies
(4) Bypass attack
(2) Flank attack
(1) Frontal attack
Attacker

Defender
(3) Encirclement attack

(5) Guerilla attack

2000 Prentice Hall

Specific Attack Strategies

Price-discount
Cheaper

goods
Prestige goods
Product proliferation
Product innovation
Improved services
Distribution innovation
Manufacturing cost reduction
Intensive advertising promotion
2000 Prentice Hall

Nichemanship
End-user specialist
Vertical-level specialist
Customer-size specialist
Specific-customer specialist
Geographic specialist
Product or product-line specialist
Product-feature specialist
Job-shop specialist
Quality-price specialist
Service specialist
Channel specialist

2000 Prentice Hall

Balance

Customer
+ ID opportunities
+ Long-run profit
+ Emerging needs & groups
2000 Prentice Hall

Competition
+ Fighter orientation
+ Alert
+ Exploit weaknesses
- Reactive

Review
Identifying

Competitors
Evaluating Competitors
Competitive Intelligence Systems
Competitive Strategies
Customer vs. Competitor Orientation

2000 Prentice Hall