Marketing Strategy and Competitive Positioning pdf ebook

Figure 5.2 
The 
components of 
competitor analysis
Source: adapted from 
Lehmann and Winer 
(1991).
Assess
competitors’
current and
future objectives
Assess
competitors’
current
strategy
Predict competitors’ future strategies
Assess
competitors’
resource
profile

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121
THE DIMENSIONS OF COMPETITOR ANALYSIS
competitive circumstances, and be monitored for relevance when combined with overall 
strategic direction.
Goals may also give a guide to the intensity of competitor activity and rivalry. When the 
likes of Procter & Gamble or General Electric declare they are only interested in being the 
number one, or the strong number two, in markets in which they operate, it is likely that 
they will compete very hard in every new market they enter.
Finally, a company’s goals can indicate the type of trade-off it is likely to make when 
faced with adversity.
Goals can have implications across the portfolio of a company’s activities. When com-
peting against a diversified company, ambitious goals in one sector may indicate commit-
ment to another sector is diminishing. Equally, very large and diversified companies may 
often be unable to take advantage of huge financial strengths, because of an unwillingness 
to make strategic shifts in resources. Equally, financially driven companies may be unwill-
ing to take risks on new ventures, preferring instead to ‘pick the bones’ of organisations 
damaged by taking the initial risk.
Competitor goals, objectives and strategic direction are best revealed through observing 
activities pursued, and by reviewing various pronouncements made in company reports and 
press releases and the like. For example, decisions to build additional production facilities 
are a clear signal of growth objectives. The recruitment of staff with particular skills (iden-
tified through observation of recruitment advertisements) can indicate new directions in 
which a competitor may go.
Reward structures for staff can also indicate objectives, although these are less easy to 
access by a competitor. Where sales staff commission is calculated as a percentage of sales, 
for example, this suggests that sales volume (rather than profitability) is a key objective.
The ownership structure of the competitor can also be indicative of future goals. Com-
petitors owned by employees and/or managers may give higher priority to providing con-
tinuity of employment or good employee working conditions, rather than those owned by 
conventional shareholders. Likewise, competitors run through the public sector may set 
higher priorities on social goals as opposed to profitability (although not always). Competi-
tors owned as part of a diversified conglomerate might focus on short-term cash generation, 
rather than long-term market position objectives.