Competitor Identification and Analysis - How Do You Do Yours?

Abstract

Firms do not merely have to be good at meeting the needs of customers; it has to be better than competitors. Just as customers need to be analysed and understood, so do competitors. Competitor identification and analysis have taken on greater importance in the planning activities of firms, primarily because of the global economic crisis that have characterized many industries. This has compelled many firms to grow only by beating others. Indeed, firms that focus on competitor’s actions have been found to achieve better business performance than those who pay less attention to their competitors [Noble, C et al, 2002].However, undertaking competitor identification and analysis that add value to corporate wealth has been a difficult task for many managers. Managerial myopia in identifying competitive threats and opportunities is a well recognized phenomenon [Levitt, 1960, Zajar and Bazerman, 1991]. The insufficient understanding may arise from substitutability on the supply side only or on the demand side. Indeed, managers who focus only on the product arena in scanning their competitive environment may fail to notice threats and opportunities that are developing due to global growth in wealth, technology, available range of products [goods and services] that can offer better solutions customers need and the latent capabilities of all firms operating in the market.The purpose of this paper is to provide an insight from the field of strategic management in general and marketing in particular to identify competitors based on segment needs served and geographic location operated on one hand, and the comparative market-based resources of competing firms. This has help to define competitors to be primary, secondary and tertiary.Furthermore, a user friendly competitor analysis has been done by using the value chain analysis to address the information needs in competitor analysis. This has helped to create the needed analysis processes and practices to achieve valued competitor analysis.