Competitor Analysis -Figure 4
The competitor analysis is comprised of three steps according to Kotler and Armstrong. The first is identifying the company’s competitors. The second is assessing competitor’s objectives, strategies, strengths, and weaknesses. The third is selecting which competition to attack or to avoid.
Identifying Competitors
Companies have a large task at hand when they identify their competitors. They have to asses any company that makes similar products or the same class of products. In this stage companies have to avoid competitor myopia which refers to new competition that replaces the product completely. Companies have to look at their current industry and decide which products are competition in that market. For example, hotels must look at not other brands of hotels, but anywhere that offers a place to stay (Kotler and Armstrong, 2014).
Assessing Competitors
When assessing competitors companies must understand how much of the market they hold, what their goals are. In addition, they have to pay attention to strategic groups which follow the same or similar strategy. Most importantly, companies muse benchmark themselves against competitors. They need to understand the strengths and weakness of their product as well as the competition to avoid being surpassed by competition and gain ability to improve their product. Lastly, understanding the competitions philosophy of business will allow them to see how they will react to changes.
Selecting Competitors
When a company chooses who to compete against they tend to choose the weak competition. With this concept the firm will have a low gain because they are a weak competitor. Companies need to preform a customer value analysis to understand what benefits the customers want to see how that measures against what competition offers. Competition allows for creativity and benefits. Competition also allows for increases in demand and share costs of product development (Kotler and Armstrong, 2014). Targeting weak or close competitors can result in the emergence of bigger competition. The company wants to gain competitive advantage by providing benefits competition can’t and that is the most successful way to challenge competition.
Applied Learning
Competitor Analysis was a key component in my groups market analysis (see applied work page). In- Shape is the first corporate gym who could potentially offer childhood exercise classes. However, small competition like private children’s gyms and video game exercise is a competition. In order to identify our place in the market and gain a competitive advantage we had to utilize the corporate sector of the business. Although competition could emerge from other gyms, In- Shape would have broken the ice for childhood exercise classes. Instead of crushing small or weak competition, we utilized them to share how our success with children exercise would surpass the competition on a significant scale.
Sources
Kotler, P. & Armstrong, G. (2014). Principles of Marketing. Upper Saddle River, NJ: Pearson Education, Inc.
Journey through Marketing 