Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 5 COMPETITOR ANALYSIS
strength) or generic skills (such as the company’s ability to grow, quick response capability, 
ability to adapt to change, staying power or innovativeness).
Lehmann and Winer (1991) suggest concentrating the analysis on five key competitor 
abilities:
1 
Ability to conceive and design. Assessing the ability of a competitor to innovate will 
help the firm predict the likelihood of new products being brought to market, or of new 
technologies being employed to ‘leapfrog’ existing products. Indications of this type of 
ability come from assessing technical resources (such as patents and copyrights held), 
human resources (the calibre of the creative and technical staff employed) and funding 
(both the total funds available and the proportion devoted to research and development, 
relative to industry average).
2 
Ability to produce. In manufacturing industries, this will include production capacity 
and utilisation, while in service industries capacity to deliver the service will be criti-
cal. Firms with slack capacity should have more opportunities to respond to increased 
demand. Similarly, service firms that can manage resources flexibly by, for example, call-
ing on temporary but sufficiently skilled and motivated staff may enjoy more flexibility 
than those with a fixed staff with rigid skills. Ability to produce is signalled by physical 
resources (such as plant and equipment) together with human resources (including the 
skills and flexibility of the staff employed).
3 
Ability to market. Despite strong innovation and production abilities, a competitor may 
be relatively weak at marketing its products or services to customers. Assessing market-
ing capability is best accomplished through examining the elements of the marketing 
mix. Central to this analysis, however, will be the assessment of the skills of the people 
involved in sales, marketing, advertising, distribution and so on. Also important will be 
the funds available and devoted to marketing activities. How well does the competitor 
understand the market? The answer to this question may lie in the extent and type of 
marketing research being undertaken.
4