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• Short Description • Background • Strategic Rationale & Implications • Strengths & Advantages • Weaknesses & Limitations • Process for Applying Technique • Summary • FAROUT

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.2

Ch7. Competitive Positioning

Short Description • Analyze a position relative to one’s own in order

to: – Preserve an advantage – Attempt an improvement – Withdraw from a market

• Looks at:

– Market share, client perceptions, current

marketing strategies, prices and costs, and competitors’ positions.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.3

Ch7. Competitive Positioning

Background

1950’s-60’s

Late 60’s- 70’s

•‘Corporate planning’ approach by firms founded on steady expansion in a stable financial environment. •Marketing tells about product benefits in comparison with competition.

•Corporate planning shifts to strategic planning and management to as competition increases and market is more volatile. •Marketing attempts to change perception of product in the mind of the customer by creating unique position.

1980’s- now •Competitive positioning continues to evolve to provides information with importance to the development of a strategic plan by giving a firm an overview of its industry and enabling it to appraise its own competitive position.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.4

Ch7. Competitive Positioning

Strategic Rationale & Implications

• Analysis should reveal firms’ position within an industry. • Overview of industry as a whole. • A variety of tools and models can assist, including:

Porter’s Five Forces Industry Analysis Nine Forces Industry Analysis BCG Matrix McKinsey Matrix Perceptual Maps

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.5

Ch7. Competitive Positioning

• Strategic Rationale & Implications

4 Directions for any Strategy

Develop firms’ position

Expand niche

Minor to dominant

Joint to sole dominance

Maintain strong position

Preserve market share in mature market

Defend dominant position

Withdraw from market

Price cutting strategy

New product strategy

Other strategies

Market decline or obsolescence

Unsuccessful expansion

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.6

Ch7. Competitive Positioning

Strengths and Advantages • Improves decision making

• Provides information for firms of all sizes,

stages, and positions on: – Gaps in marketplace – Viability of products or markets – Competition in new markets – Attracting investment and creating alliances

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.7

Ch7. Competitive Positioning

Weaknesses and Limitations • Care must be taken in defining industries and

markets.

• Competitor information is not always available. • Competitor and new product information is not

always accurate.

• Results may be limited by internal biases. • Third party analysts may be misled by incomplete

information.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.8

Ch7. Competitive Positioning

Process for Applying the Technique Can be defined as a broad 3-step process:

Identify focus of your firm's current strategy and analysis parameters such as market or products to be assessed.

Conduct analysis with the following:

• Market segmentation • Industry Analysis • Market Research

Derive insights from the above analysis and formulate

positioning strategy for your firm.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.9

Ch7. Competitive Positioning

Process for Applying the Technique • Step 1: Assess current strategy and market,

product, project, parameters. – What is the scope of this project? – What do you plan to do with this information? – Will research be done in house, or by a third

party?

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.10

Ch7. Competitive Positioning

Process for Applying the Technique • Product Market Matrix

Markets

current

potential

Products

Current

Potential

c u r r e t n t

*SOURCE: Royce and Morse (1983), Competitive Analysis, SRI International.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Description Business Volume Demand Trends Competition Market Shares Technology Changes Ease of Entry Compatibility Exit Barriers

Description Business Volume Demand Trends Competition Market Shares Technology Changes Ease of Entry Compatibility

Options

Keep or drop?

Determine Product Structure

Set Pricing

Options Determine Product Structure

Choose timing

Go/No go

Ch7.11

Ch7. Competitive Positioning

Process for Applying the Technique • Step 2: Conduct Analysis – Market Segmentation:

• Identifiable and measurable • Accessible by communication/distribution

channels

• Have unique needs • Be stable over time

– Segments may be made up of individual or industry consumers.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.12

Ch7. Competitive Positioning

Process for Applying the Technique • Step 2: Conduct Analysis: Market Segmentation

Individual

Industry

Geography

Demographics

Psychographics

Behavior

Geography

Client Type

Client Behavior

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.13

Ch7. Competitive Positioning

Process for Applying the Technique • Step 2: Conduct Analysis: Industry

– SWOT Analysis – Porter’s Five Forces Model – Other tools

• Step 2: Conduct Analysis: Market Research

– Preferably conducted by third party. – Use surveys, telemarketing, face-to-face

interviews.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.14

Ch7. Competitive Positioning

Process for Applying the Technique • Step 3: Formulate position strategy

– Use combination of perceptual maps, strengths and weaknesses of self and competitors on matrices, and refer back to information gathered in Steps 1&2.

Strength/Weakness Evaluation Matrix: Sales Force Quality SOURCE: Royce and Morse (1983), Competitive Analysis, SRI International

Much Better

Somewhat Better

Same

Somewhat Worse

Much Worse

0 Strength or Weakness

Relative Importance to success

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.15

Ch7. Competitive Positioning

• Summary:

Complete competitive positioning analysis will have:

– Outline of current and potential products/markets

• Product/market matrix can be helpful.

– Identified competitive practices in the industry including • Costs, revenue and profits, opportunities, weaknesses to

exploit and strengths to overcome or avoid.

– Factors contributing to client satisfaction with their

current suppliers

• Ability to understand value of purchases, availability &

convenience of products, quality of service, loyalty, effort required to change suppliers.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.16

Ch7. Competitive Positioning

Summary Continued: • Undertake an overall appraisal of the competitive

environment to identify any strategies or tactics, which may improve your firm’s competitive position and identified a set of strategies to take the firm where it wishes to go in an industry.

• Should have comprehensive view of the market. • Any gaps or unmet needs should be apparent.

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.17

Ch7. Competitive Positioning

• FAROUT Summary

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.18

Ch7. Competitive Positioning

Related Tools and Techniques • Industry Analysis • SWOT Analysis • Value Chain Analysis • Competitor Analysis • Financial Ratio and Statement Analysis • Customer Segmentation Analysis • BCG Growth/Share Portfolio Matrix • GE Business Screen

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.19

Ch7. Competitive Positioning

Related Tools and Techniques Cont’d • Supply Chain Analysis • Product Line Analysis • Benchmarking

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.20

Ch7. Competitive Positioning

For More About Competitive Positioning and 23 Other Useful Analysis Methods, see:

Fleisher, Craig S. and Babette E. Bensoussan

Business and Competitive Analysis: Effective Application of New and Classic Methods

Upper Saddle River, NJ 2007

Business and Competitive Analysis. By C. Fleisher & B. Bensoussan.

Ch7.21