Chapter 4: Competitive Anlaysis
Identifying and understanding competitor and competitive environment.
Understanding what makes a market attractive (or unacttractive).
The reason why you have to analyse is to position your product to take advantage of your
competitiv edge.
Competitors are anyone that satisfies the same customer.
I- Analysis Tools
1) Porter's 5 Force
Michael Porter (1979). Model used to analyse an industry.
5 forces that determine how competitive an industry is ; and determine how attractive an
industry is.
– Threat of new competitors : what are the barriers to entry, time and cost of entry
and technology protection.
– Supplier bargaining power : number of suppliers and cost of changing supplier.
– Threat of substitutes : substitute is a competing product from another industry.
– Customer bargaining power : number of customers and price sensibility.
– Competitite rivalry among existing firms : number of competitors and customer
loyalty.
2) SWOT
It is more internal. It is a decision making tool used to analyse any situation. Strenght
Weaknesses Opportunities Threats. Use it to develop a strategy that takes advantage of
your strenghts and opportunities.
Adresses your weaknesses and threats (negative sides).
Internal factors
Strenghts: Competitive advantages (eg: financial strenght, brand loyalty, service strength)
Weaknesses : Competitive disadvantages (eg: old technology)
External factors
Opportunities : Conditions that make your product more attractive (eg: new markets to
enter)
Threats : Conditions that make your product less attractive (eg: competitor action, cost
increases).
Identifying and understanding competitor and competitive environment.
Understanding what makes a market attractive (or unacttractive).
The reason why you have to analyse is to position your product to take advantage of your
competitiv edge.
Competitors are anyone that satisfies the same customer.
I- Analysis Tools
1) Porter's 5 Force
Michael Porter (1979). Model used to analyse an industry.
5 forces that determine how competitive an industry is ; and determine how attractive an
industry is.
– Threat of new competitors : what are the barriers to entry, time and cost of entry
and technology protection.
– Supplier bargaining power : number of suppliers and cost of changing supplier.
– Threat of substitutes : substitute is a competing product from another industry.
– Customer bargaining power : number of customers and price sensibility.
– Competitite rivalry among existing firms : number of competitors and customer
loyalty.
2) SWOT
It is more internal. It is a decision making tool used to analyse any situation. Strenght
Weaknesses Opportunities Threats. Use it to develop a strategy that takes advantage of
your strenghts and opportunities.
Adresses your weaknesses and threats (negative sides).
Internal factors
Strenghts: Competitive advantages (eg: financial strenght, brand loyalty, service strength)
Weaknesses : Competitive disadvantages (eg: old technology)
External factors
Opportunities : Conditions that make your product more attractive (eg: new markets to
enter)
Threats : Conditions that make your product less attractive (eg: competitor action, cost
increases).
