Today I have been...
Reading about competitor analysis
Why?
Required reading
So What?
So you know about your environment, your industry and its strategic groups. But what do you know about your competitors?
You need to consider other organisations in your industry, and look at the differences in the way they generate added value.
Who are your competitors? What do they (intend to) do?
Can you identify them and predict their behaviour?
Vague industry boundaries can make this more difficult. Consideration of existing products/service markets is insufficient. Don't forget to consider those who are capable of entering your strategic space.
Our old friend Michael Porter in Competitive Advantage (1985) argues that organisations compete either on the basis of cost or of differentiation. These are the basis of Porter's Generic Strategies. However what is also important is the competitive scope. Is it broad or narrow?
Examples:- Ford & Toyota have a broad competitive scope, BMW have a narrow scope. OU has a broad scope and goes for differentiation against other distance learning providers. Tesco goes for cost leadership, and Waitrose goes for differentiation focus but John Lewis as a whole is broad differentiation. See generic strategies diagram P64 or Powerpoint.
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