Marketing Strategy and Competitive Positioning pdf ebook

Figure 5.1 
The 
targets of 
competitor analysis
New entrants or substitutes
Industry competition
Strategic
group
Companies seeking to diversify, or with new
skills to exploit in the industry
Willing, able and encouraged 
to overcome entry barriers 
to the strategic 
group

---

120
CHAPTER 5 COMPETITOR ANALYSIS
Figure 5.2 highlights four main stages of competitor analysis. These are:
1 
Assessing competitors’ current and future objectives: understanding what a competitor 
is trying to achieve can give clues as to the direction it will take, and the aggressiveness 
with which it will pursue that direction.
2 
Assessing the competitors’ current strategies: understanding the strategies used by com-
petitors in pursuit of their goals and objectives, the firm can identify opportunities and 
threats arising from competitor actions.
3 
Assessing competitors’ resources: understanding the asset and capability profile of com-
petitors shows what they are currently able to do. While competitor assets and capabili-
ties might not be fully deployed, understanding presents clues as to how competitors 
might move in future, or how they might react to threats.
4 
Predicting competitors’ future strategies: understanding the previous three analyses starts 
to answer perhaps the most fundamental question in competitor analysis – that is, what 
is the firm likely to do in the future?
Each of these stages is now discussed in detail. In particular, potential sources of infor-
mation are suggested, and ways in which the analyses might be conducted. The aim of the 
analysis is not to describe competitors, but to present insights into their future intentions 
and, importantly, what competitors are likely to do in response to competitive actions.
5.2.1 Assessing competitors’ current and future objectives
Understanding the goals or objectives of competitors guides strategy development on three 
levels (see Figure 5.3). Goals can indicate where the company is intending to develop and in 
which markets, either by industry or internationally, any major initiatives can be expected. 
The areas of expansion could indicate markets that are to be particularly competitive, but 
may simultaneously signify companies not so committed.
Where the intention is profitable co-existence, then it is often better to compete in areas 
that are deemed of secondary interest to major companies, rather than trying to compete 
directly. Such was the opportunity created when General Motors and Ford once declared 
that the small car markets in the United States and Europe were intrinsically unprofit-
able, and therefore of little interest to them. Interestingly, both are now actively pursuing 
this market as a competitive response to pressure from governments and environmental 
lobbyists. This has led to massive investment in hybrid and electric cars from all main 
manufacturers and new-entrant challenger brands, such as Tesla. Additionally, and con-
tributing to this change, there has been a large reduction in demand from customers for 
the once-dominant diesel engine. This illustrates that goals should change and adapt to