University of Ouargla Kasdi-Merbah

Faculty of economic and commercial sciences, management

Section: commercial sciences

Module: English

The first Master: Marketing Services

Searching on:

analysis Competitors in marketing

Students

Teacher
Gheribi Abdelhadi

GUERRIDA MOHAMMED
TEMMAR HODAYFA
ZITOUNI CHAOUKI

2015/2016

contents
WHO ARE YOUR COMPETITORS?
WHAT YOU NEED TO KNOW ABOUT YOUR
COMPETITORS?
LEARNING ABOUT YOUR COMPETITORS
competitive Advantage
Industry analysis
Competitor analysis
Competitor profiling
Media scanning
New competitors

WHO ARE YOUR COMPETITORS?

All businesses face competition. Even if you're the only restaurant in town you must
compete with cinemas, bars and other businesses where your customers will spend their
money instead of with you. With increased use of the Internet to buy goods and services
and to find places to go, you are no longer just competing with your immediate
neighbours. Indeed, you could find yourself competing with businesses from other
countries.
Your competitor could be a new business offering a substitute or similar product that
makes your own redundant.
Competition is not just another business that might take money away from you. It can be
another product or service that's being developed and which you ought to be selling or
looking to license before somebody else takes it up.

And don't just research what's already out there. You also need to be constantly on the
lookout for possible new competition.
You can get clues to the existence of competitors from:
local business directories
your local Chamber of Commerce
advertising
press reports
exhibitions and trade fairs
questionnaires
searching on the Internet for similar products or services
information provided by customers
flyers and marketing literature that have been sent to you - quite common if you're
on a bought-in marketing list
searching for existing patented products that are similar to yours
planning applications and building work in progress

WHAT YOU NEED TO KNOW ABOUT YOUR COMPETITORS

Monitor the way your competitors do business. Look at:
the products or services they provide and how they market them to customers
the prices they charge
how they distribute and deliver
the devices they employ to enhance customer loyalty and what back-up service they

offer
their brand and design values
whether they innovate - business methods as well as products
their staff numbers and the calibre of staff that they attract
how they use IT - for example, if they're technology-aware and offer a website and

email

who owns the business and what sort of person they are
their annual report - if they're a public company
their media activities - check their website as well as local newspapers, radio,
television and any outdoor advertising
Consult Corporations Canadas Choosing a name and the Registraire des
entreprises' database in Qubec to check the availability of a company name, and
the Canadian Trade-marks Database for the availability of a trade mark.
How they treat their customers
Find out as much as possible about your competitors' customers, such as:

who they are

what products or services different customers buy from them
what customers see as your competitors' strengths and weaknesses
whether there are any long-standing customers
if they've had an influx of customers recently
What they're planning to do
Try to go beyond what's happening now by investigating your competitors' business
strategy, for example:

what types of customer they're targeting

what new products they're developing
what financial resources they have

LEARNING ABOUT YOUR COMPETITORS

Read about your competitors. Look for articles or ads in the trade press or mainstream
publications. Read their marketing literature. Check their entries in directories and
phone books. If they are an online business, ask for a trial of their service.
Are they getting more publicity than you, perhaps through networking or sponsoring
events?
If your competitor is a public company, read a copy of their annual report.
Consult Corporations Canadas Choosing a name and the Registraire des
entreprises' database in Qubec to check the availability of a company name, and
the Canadian Trade-marks Database for the availability of a trade mark.
Go to exhibitions
At exhibitions and trade fairs check which of your competitors are also exhibiting. Look at
their stands and promotional activities. Note how busy they are and who visits them.
Go online
Look at competitors' websites. Find out how they compare to yours. Check any
interactive parts of the site to see if you could improve on it for your own website. Is the
information free of charge? Is it easy to find?
Business websites often give much information that businesses haven't traditionally
revealed - from the history of the company to biographies of the staff.
Use a search engine to track down similar products. Find out who else offers them and
how they go about it.
Websites can give you good tips on what businesses around the globe are doing in your
industry sector.
Organisations and reference sources

Your trade or professional association, if applicable.

The local Chamber of Commerce.
Directories and survey reports in any business reference library.
Our Strategic Information Centre

HEARING ABOUT YOUR COMPETITORS

Speak to your competitors. Phone them to ask for a copy of their brochure or get one of
your staff or a friend to drop by and pick up their marketing literature.
You could ask for a price list or enquire what an off-the-shelf item might cost and if
there's a discount for volume. This will give you an idea at which point a competitor will
discount and at what volume.
Phone and face-to-face contacts will also give you an idea of the style of the company, the
quality of their literature and the initial impressions they make on customers.
It's also likely you'll meet competitors at social and business events. Talk to them.
Be friendly - they're competitors not enemies. You'll get a better idea of them - and you
might need each other one day, for example in collaborating to grow a new market for a
new product.
Listen to your customers and suppliers
Make the most of contacts with your customers. Don't just ask how well you're performing
- ask which of your competitors they buy from and how you compare.
Use meetings with your suppliers to ask what their other customers are doing. They may
not tell you everything you want to know, but it's a useful start.
Use your judgement with any information they volunteer. For instance, when customers
say your prices are higher than the competition they may just be trying to negotiate a better
deal.

HOW TO ACT ON THE COMPETITOR INFORMATION YOU GET

Evaluate the information you find about your competitors. This should tell you whether
there are gaps in the market you can exploit. It should also indicate whether there is a
saturation of suppliers in certain areas of your market, which might lead you to focus on
less competitive areas.
Draw up a list of everything that you've found out about your competitors, however small.
Put the information into three categories:

what you can learn from and do better

what they're doing worse than you
what they're doing the same as you
What you can learn from and do better
If you're sure your competitors are doing something better than you, you need to respond
and make some changes. It could be anything from improving customer service, assessing
your prices and updating your products, to changing the way you market yourself,
redesigning your literature and website and changing your suppliers.
Try to innovate not imitate. Now you've got the idea, can you do it even better, add more
value?
Your competitors might not have rights over their actual ideas, but remember the rules on
patents, copyright and design rights. For more information, consult the Intellectual
Property Toolkit.
What they're doing worse than you
Exploit the gaps you've identified. These may be in their product range or service,
marketing or distribution, even the way they recruit and retain employees.
Customer service reputation can often provide the difference between businesses that
operate in a very competitive market. Renew your efforts in these areas to exploit the
deficiencies you've discovered in your competitors.
But don't be complacent about your current strengths. Your current offerings may still need
improving and your competitors may also be assessing you. They may adopt and enhance
your good ideas.
What they're doing the same as you
Why are they doing the same as you, particularly if you're not impressed by other things
they do? Perhaps you both need to make some changes.
Analyse these common areas and see whether you've got it right. And even if you have,
your competitor may be planning an improvement.

Original document, Understand your competitors, Crown copyright 2009

Source: Business Link UK (now GOV.UK/Business)
Adapted for Qubec by Info entrepreneurs
Our information is provided free of charge and is intended to be helpful to a large range of
UK-based (gov.uk/business) and Qubec-based (infoentrepreneurs.org) businesses.
Because of its general nature the information cannot be taken as comprehensive and
should never be used as a substitute for legal or professional advice. We cannot guarantee
that the information applies to the individual circumstances of your business. Despite our
best efforts it is possible that some information may be out of date.
As a result:

The websites operators cannot take any responsibility for the consequences of errors
or omissions.
You should always follow the links to more detailed information from the relevant
government department or agency.
Any reliance you place on our information or linked to on other websites will be at
your own risk. You should consider seeking the advice of independent advisors, and
should always check your decisions against your normal business methods and best
practice in your field of business.
The websites operators, their agents and employees, are not liable for any losses or
damages arising from your use of our websites, other than in respect of death or personal
injury caused by their negligence or in respect of fraud.

Industry analysis
One way to look at competition is by industry analysis. Competition drives down rates of
return on invested capital. If the rate is "competitive" it will encourage investment, if not,
it will discourage competition. Porter1 (1980) and (1985) looked at the forces influencing
competition in an industry and the elements of industry structure. Figure 6.1 shows the
four forces influencing competition, threat of new entrants, threat of substitute products,
"macro" factors like changes in technology and social factors and "micro" factors like
customers' or buyers' changing needs

Competitor analysis
One common and useful technique is constructing a competitor array. The steps
include:

Define your industry - scope and nature of the industry

Determine who your competitors are

Determine who your customers are and what benefits they expect

Determine what the key success factors are in your industry

Rank the key success factors by giving each one a weighting - The sum of all the
weightings must add up to one.

Rate each competitor on each of the key success factors

Multiply each cell in the matrix by the factor weighting.

This can best be displayed on a two dimensional matrix - competitors along the top and
key success factors down the side. An example of a competitor array follows:[4]
Key
Industry
Competitor Competitor Competitor Competitor
Weighting
Success Factors
#1 rating
#1 weighted #2 rating
#2 weighted
1
Extensive
.4
distribution

2.4

1.2

2 - Customer focus

.3

1.2

1.5

3 - Economies of
.2
scale

.6

.6

4
innovation

.1

.7

.4

1.0

20

4.9

15

3.7

Totals

Product

In this example competitor #1 is rated higher than competitor #2 on product innovation

ability (7 out of 10, compared to 4 out of 10) and distribution networks (6 out of 10), but
competitor #2 is rated higher on customer focus (5 out of 10). Overall, competitor #1 is
rated slightly higher than competitor #2 (20 out of 40 compared to 15 out of 40). When the

success factors are weighted according to their importance, competitor #1 gets a far better
rating .
Two additional columns can be added. In one column you can rate your own company on
each of the key success factors (try to be objective and honest). In another column you can
list benchmarks. They are the ideal standards of comparisons on each of the factors. They
reflect the workings of a company using all the industry's best practices.

Competitor profiling
The strategic rationale of competitor profiling is powerfully simple. Superior knowledge
of rivals offers a legitimate source of competitive advantage. The raw material of
competitive advantage consists of offering superior customer value in the firms chosen
market. The definitive characteristic of customer value is the adjective, superior. Customer
value is defined relative to rival offerings making competitor knowledge an intrinsic
component of corporate strategy. Profiling facilitates this strategic objective in three
important ways.[5] First, profiling can reveal strategic weaknesses in rivals that the firm
may exploit. Second, the proactive stance of competitor profiling will allow the firm to
anticipate the strategic response of their rivals to the firms planned strategies, the
strategies of other competing firms, and changes in the environment. Third, this proactive
knowledge will give the firms strategic agility. Offensive strategy can be implemented
more quickly in order to exploit opportunities and capitalize on strengths. Similarly,
defensive strategy can be employed more deftly in order to counter the threat of rival firms
from exploiting the firms own weaknesses.[3]
Clearly, those firms practicing systematic and advanced competitor profiling have a
significant advantage. As such, a comprehensive profiling capability is rapidly becoming a
core competence required for successful competition. An appropriate analogy is to
consider this advantage as akin to having a good idea of the next move that your opponent
in a chess match will make. By staying one move ahead, checkmate is one step closer.
Indeed, as in chess, a good offense is the best defense in the game of business as well.[3]
A common technique is to create detailed profiles on each of your major competitors.
[6]
These profiles give an in-depth description of the competitor's background, finances,
products, markets, facilities, personnel, and strategies. This involves:

Background
location of offices, plants, and online presences

history - key personalities, dates, events, and trends

ownership, corporate governance, and organizational structure

Financials

P-E ratios, dividend policy, and profitability

various financial ratios, liquidity, and cash flow

profit growth profile; method of growth (organic or acquisitive)

Products

products offered, depth and breadth of product line, and product portfolio
balance

new products developed, new product success rate, and R&D strengths

brands, strength of brand portfolio, brand loyalty and brand awareness

patents and licenses

quality control conformance

reverse engineering or deformulation

Marketing

segments served, market shares, customer base, growth rate, and customer
loyalty

promotional mix, promotional budgets, advertising themes, ad agency used,

sales force success rate, online promotional strategy

distribution channels used (direct & indirect), exclusivity agreements,

alliances, and geographical coverage

pricing, discounts, and allowances

Facilities

plant capacity, capacity utilization rate, age of plant, plant efficiency, capital
investment
location, shipping logistics, and product mix by plant
Personnel

number of employees, key employees, and skill sets

strength of management, and management style

compensation, benefits, and employee morale & retention rates

Corporate and marketing strategies

objectives, mission statement, growth plans, acquisitions, and divestitures

marketing strategies

Media scanning
Scanning competitor's ads can reveal much about what that competitor believes about
marketing and their target market. Changes in a competitor's advertising message can
reveal new product offerings, new production processes, a new branding strategy, a
new positioning strategy, a new segmentation strategy, line extensions and contractions,
problems with previous positions, insights from recent marketing or product research, a
new strategic direction, a new source of sustainable competitive advantage, or value
migrations within the industry. It might also indicate a new pricing strategy such
as penetration, price discrimination, price skimming, product bundling, joint product
pricing, discounts, or loss leaders. It may also indicate a new promotion strategy such as
push, pull, balanced, short term sales generation, long term image creation, informational,
comparative, affective, reminder, new creative objectives, new unique selling proposition,
new creative concepts, appeals, tone, and themes, or a new advertising agency. It might
also indicate a new distribution strategy, new distribution partners, more extensive
distribution, more intensive distribution, a change in geographical focus, or exclusive
distribution. Similar techniques can be used by observing a competitor's search engine
optimization targets and practices.[7] For example, by conducting keyword research, one
may be able to determine a competitor's target market, keywords, or products. Other
metrics allow for detection of a competitor's success. [8] Little of this intelligence is
definitive: additional information is needed before conclusions should be drawn.

A competitor's media strategy reveals budget allocation, segmentation and targeting

strategy, and selectivity and focus.[9][10] From a tactical perspective, it can also be used to
help a manager implement his own media plan. By knowing the competitor's media buy,
media selection, frequency, reach, continuity, schedules, and flights, the manager can
arrange his own media plan so that they do not coincide.
Other sources of corporate intelligence include trade shows, patent filings, mutual
customers, annual reports, and trade associations.
Some firms hire competitor intelligence professionals to obtain this information.
The Society of Competitive Intelligence Professionals maintains a listing of individuals
who provide these services.

New competitors
In addition to analysing current competitors, it is necessary to estimate future competitive
threats. The most common sources of new competitors are:

Companies competing in a related product/market

Companies using related technologies
Companies already targeting your prime market segment but with unrelated
products
Companies from other geographical areas and with similar products
New start-up companies organized by former employees and/or managers of
existing companies

The entrance of new competitors is likely when:

There are high profit margins in the industry

There is unmet demand (insufficient supply) in the industry

There are no major barriers to entry

There is future growth potential

Competitive rivalry is not intense

Gaining a competitive advantage over existing firms is feasible

References
1. Porter, M.E. "Competitive Strategy". New York: The Free Press, 1980.
2. Porter, M.E. "The Competitive Advantage of Nations". New York: The Free Press,
1990.
3. Porter, M.E. "Competition in Global Industries". Boston: Harvard Business School
Press, 1986.
Bibliography
4. Duro, R.B. "Winning the Marketing War". John Wiley and Sons, 1989.
5. Hall, W.K. "Survival Strategies in a Hostile Environment". Harvard Business Review.
Sept-Oct 1980, pp 75-85.
6. Porter, M.E. "Competitive Advantage". New York: The Free Press, 1985.
7. Hammermesh, R.G. and Silk, S.B. "How to Compete in Stagnant Industries". Harvard
Business Review. Sept-Oct 1979, pp 161-168.