Competitor Analysis

• The competitor environment is the final part of the external environment requiring study.
• Competitor analysis focuses on each company against which a firm competes directly.
• In a competitor analysis, the firm seeks to understand the competitor's:

  Future objectives (what drives them)

  Current strategy (doing and can do)

  Assumptions (what they believe about the industry)

  Capabilities (strengths and weaknesses)
• Knowledge about the competitor analysis dimensions/components helps the firm prepare an anticipated response profile for each competitor
• The results of an effective competitor analysis help a firm understand, interpret, and predict its competitors’ actions and responses.
• research suggests that executives often fail to analyze competitors’ possible reactions to competitive actions their firm takes, placing their firm at a potential competitive disadvantage as a result.
• Critical to an effective competitor analysis is gathering data and information that can help the firm understand its competitors’ intentions and the strategic implications resulting from them.
• Useful data and information combine to form competitor intelligence
• the set of data and information the firm gathers to better understand and anticipate competitors’ objectives, strategies, assumptions, and capabilities

  competitor intelligence
• In competitor analysis, the firm gathers intelligence not only about its competitors, but also regarding public policies in countries around the world to understand foreign competitors.
• When asked to describe competitive intelligence, phrases such as “competitive spying” and “corporate espionage” come to my mind for some.
• competitive intelligence is an activity that appears to involve trade-offs
• the rules of engagement to follow when gathering competitive intelligence change in different contexts


  “what is ethical in one country is different from what is ethical in other countries.”
• firms avoid the possibility of legal entanglements and ethical quandaries only when their competitive intelligence gathering methods are governed by a strict set of legal and ethical guidelines.
• ethical behavior and actions, as well as the mandates of relevant laws and regulations, should be the foundation on which a firm’s competitive intelligence - gathering process is formed
• are companies or networks of companies that sell complementary goods or services that are compatible with the focal firm’s good or service

  complementors
• When a complementor’s good or service contributes to the functionality of a focal firm’s good or service, it in turn creates additional value for that firm.
• Complementors expand the set of competitors that firms must evaluate when completing a competitor analysis.