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Competitor Analysis and Strategy Insights

Here are a few key points on when the environment may be unattractive for a new entrant in an established industry: - Established competitors have strong brand recognition and customer loyalty that will be difficult for a new entrant to overcome. For example, Air Asia has been operating for over 20 years and has built a loyal customer base in Southeast Asia. - Established competitors have economies of scale advantages from many years of operations that lower their costs. For example, Air Asia operates a large fleet of aircraft and has negotiated favorable deals with suppliers. A new airline will not achieve these scale benefits initially. - There may be high barriers to entry in terms of capital requirements, technology needs, regulatory approvals, and access to distribution

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Duffin Anggana
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110 views15 pages

Competitor Analysis and Strategy Insights

Here are a few key points on when the environment may be unattractive for a new entrant in an established industry: - Established competitors have strong brand recognition and customer loyalty that will be difficult for a new entrant to overcome. For example, Air Asia has been operating for over 20 years and has built a loyal customer base in Southeast Asia. - Established competitors have economies of scale advantages from many years of operations that lower their costs. For example, Air Asia operates a large fleet of aircraft and has negotiated favorable deals with suppliers. A new airline will not achieve these scale benefits initially. - There may be high barriers to entry in terms of capital requirements, technology needs, regulatory approvals, and access to distribution

Uploaded by

Duffin Anggana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Unit 9

 Organizations must operate within a


competitive industry environment
 Analyzing organization’s competitors
helps an organization to discover its
weaknesses, to identify opportunities for
and threats to the organization from the
industrial environment
 Managers must consider the strategies of
organization’s competitors
 Competitor analysis begins with identifying
present as well as potential competitors
 It gives information regarding probable
sources of competition (including all the
possible strategic actions and reactions and
effects on profitability for all the
organizations competing in the industry)
 Porter’sFive Forces Model has assumed that
the competitive environment within an
industry depends on five forces-
 Threat of new potential entrants,
 Threat of substitute product/services,
 Bargaining power of suppliers,
 Bargaining power of buyers,
 Rivalry among current competitors.
 These five forces should be used as a
conceptual background for identifying an
organization’s SWOT for the organization
from it’s competitive environment.
objectives of doing competitor analysis can
be summarized as follows:
 To study the market;
 To predict and forecast organization’s
demand and supply;
 To formulate strategy;
 To increase the market share;
 To study the market trend and pattern;
 To develop strategy for organizational
growth;
 When the organization is planning for the
diversification and expansion plan; To study
forthcoming trends in the industry;
 Understanding the current strategy strengths
and weaknesses of competitors may help in
predicting upcoming threats and
opportunities
 Identify your top ten competitors
 Analyze and compare competitor content
(gather intel)
 Latest data
 Analyze their SEO
 Look at their social media engagement
 Identify areas for improvement
 Do a SWOT analysis
A summary step in conducting an internal
strategic-management audit is to construct
an Internal Factor Evaluation (IFE) Matrix.
This strategy-formulation tool summarizes &
evaluates the major strengths and
weaknesses in the functional areas of a
business, and it also provides a basis for
identifying and evaluating relationships
among those areas
 Listkey internal factors as identified in the
internal-audit process. Use a total of from 10
to 20 internal factors, including both
strengths and weaknesses. List strengths first
and then weaknesses
 Assign a weight that ranges from 0.0 (not
important) to 1.0 (all-important) to each
factor. The weight assigned to a given factor
indicates the relative importance of the
factor to being successful in the firm’s
industry. The sum of all weights must equal
1.0
 Assign a 1-to-4 rating to each factor to
indicate whether that factor represents a
major weakness (rating = 1), a minor
weakness (rating = 2), a minor strength
(rating = 3), or a major strength (rating = 4).
Note that strengths must receive a 3 or 4
rating and weaknesses must receive a 1 or 2
rating.
 Multiply each factor’s weight by its rating to
determine a weighted score for each
variable.
 Sum the weighted scores for each variable to
determine the total weighted score for the
organization.
 See Table 4.10 for an example
How or when is the environment unattractive?
(if you are new to the industry). Take for
Example – you are new to the budget airline
industry where Air Asia is present.

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