5) Competitor Analysis

Question 1

According to Wilson and Gilligan(1997) competitor analysis has three roles:

Answer 1

• to help management understand their competitive advantages and disadvantages relative to competitors
• to generate insights into competitors past, present and potential strategies
• to give an informed basis for developing future strategies to sustain or establish advantages over competitors

Question 2

In Porters competitor analysis framework, he suggests four key aspects:

Answer 2

1) identifying a competitor’s strategy
2) identifying a competitor’s objectives
3) identifying a competitor’s assumptions about the industry
4) identifying the competitors resources and capabilities

Question 3

The Boston Consulting Group (BCG) model:

Answer 3

Diagram on pg 161

Question 4

Limitations of the BCG model:

Answer 4

• simplistic - only considers two variables
• connection btn market share and cost saving is not strong
• cash cows do not always generate cash
• fail to consider creation

Question 5

Identify the four levels of competitors according to Kotler (2008):

Answer 5

• brand competitors
• industry competitors
• form competitors
• generic competitors

Question 6

The extent to which competitors pose a threat to the firm depends on:

Answer 6

• number of rivals and the extent of differentiation in the market.
• entry and mobility barriers
• cost structure
• degree of vertical integration

Question 7

You need to understand what competitors are offering so that you can offer at least as much to the customers. To do this competitor information must be collected. Types of information:

Answer 7

• competitors strategy
• competitors goals and objectives
• competitors products and services
• competitors resources and capabilities

Question 8

Fleisher and Bensoussan (2002) give a full listing of the info than an organization should gather about their competitors. The broad headings are as follows:

Answer 8

• products and services
• marketing
• Human resources
• operations
• management profiles
• sociopolitical
• technology
• organizational structure
• competitive intelligence capacity
• strategy
• customer value analysis
• financial

Question 9

There are a range of different sources of information available to organizations undertaking competitor analysis, for example:

Answer 9

• website of competitor
• annual reports and accounts of competitors
• newspaper articles and online data sources on company
• magazines and journals
• directories and yearbooks covering particular industries
• becoming a customer of the competitor

Question 10

Types of information to collect on competitors, categorized by Tudor (1992):

Answer 10

1) primary resources
2) secondary resources
3) computer-based information

Question 11

What is qualitative research and how is it undertaken?

Answer 11

Qualitative research involves the collection of non-numerical data. It investigates more the why decisions rather than the what, where and when.
It is used to gain insight into people’s attitudes and behaviors.

It is undertaken through:

• observation
• interviews
• focus groups
• analysis

Question 12

What is quantitative research?

Answer 12

Quantitative research tries to answer the what, where and when questions. The answers to these questions will be factual and numerical, eg statistical methods such as ratios and trend analysis.

Question 13

Once you have assembled detailed information about your competitors, you can benchmark your performance against theirs.

List the strategic benchmarks?

List the functional benchmarks and draw the diagram?

Answer 13

Strategic benchmarks:

• market share
• return on assets
• gross profit margin on sales

Functional benchmarks:

• % deliveries on time
• order costs per order
• order turnaround time
• average stockholding per order

Diagram: pg 172

Question 14

What is big data? And what is big data management?

Answer 14

Big data is large volumes of data beyond the normal processing, storage and analysis capacity of typical data base tools. Big data will often include much more than simply financial info and can involve other organizational data which is operational in nature along with other internal and external data which is often unstructured in form.

Big Data Management is the storage, administration and control of these vast quantities of both structured and unstructured data. The main aim of Big Data Management is to ensure the data stored is high quality and accessible.

Question 15

The three V’s: the defining characteristics of Big Data

Answer 15

• Velocity
• Volume
• Variety

Question 16

Why is big data so important?

Answer 16

Several major business benefits arise from the ability to manage Big Data successfully, including:

• innovation and improved product development
• more informed decision making
• better market segmentation

These benefits can all lead to the gaining of competitive advantage.

Question 17

Risks associated with Big Data:

Answer 17

• availability of skills to use Big Data systems which is compounded by the fact that many of the systems are rapidly developing and support is not easily and readily available.
• security of data is a major concern in the majority of organizations
• data protection issues as organizations collect greater range of data from increasingly personal sources, eg Facebook
• there is the risk that valuable time is spent measuring relationships that have no organizational value
• if organizations are to effectively utilize Big Data, this will require a change in perspective to ensure sense can be made of the info.

Question 18

Define competitor analysis?

Answer 18

Cima defines competitor analysis as identification and quantification of the relative strengths and weaknesses (compared with competitors or potential competitors), which could be of significance in the development of a successful competitive strategy