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Competitive Analysis

Competitive Analysis. A BNET Professional Development Tool. Strategic group map of the video game industry. High. Game publishers. Complexity of game. Sony, Sega, Nintendo. Arcade owners. Low. Arcades. Consoles. PCs. Distribution channels. Competitive Analysis.

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Competitive Analysis

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  1. Competitive Analysis A BNET Professional Development Tool

  2. Strategic group map of the video game industry High Game publishers Complexity of game Sony, Sega, Nintendo Arcade owners Low Arcades Consoles PCs Distributionchannels Competitive Analysis Who are my competitors? How do I analyze them? SWOTPorter’s Five ForcesStrategic Group MapsPEST analysis • There are many ways to analyze your competitors; we’ve selected the strategic group map technique. After answering a few questions, you’ll be ready to draw the strategic map. This map will illustrate the competitive forces within your industry, your competitive position, and your competitors’ positions.

  3. High High Product price Market penetration Low Low Broad Narrow Broad range Low cost focus Specialty focus Product line mix Strategic focus differentiation Creating a strategic group map 1.___________________(Direct) 2.___________________(Direct) 3.___________________(Direct) 4.___________________(Indirect) 5.___________________(Indirect) • List your five nearest competitors. These can be indirect or direct competitors but should be companies that compete closely with your product or service. These are the strategic groups that you’ll plot on your map. • Identify the two top competitive factors in your market.One competitive factor should be expressed in a high to low range. The other variable is more flexible, but should still reflect the most important competitive factor in your market. These two factors will be the X and Y map variables. Possible axes for your strategic map High Brand image Low Retail stores Online Direct mail Distribution channels

  4. Creating a strategic group map • Create groups of competitors that fall into the same strategic space. Looking at the list from Step 1 and the criteria from Step 2, assess each competitor’s strengths and weaknesses against the competitive factors. You should have 2-3 groups. Include your own company in one of the groups. • Consider strengths that the companies have individually and strengths that they share. • Consider unique characteristics of each company’s product or service as well as any feature a company’s product or service lacks. • Consider market share, marketing approach, and product mix as well as any other relevant, industry-specific factors. • Plot the strategic groups from Step 3 on your map. Draw circles around each group, making circles proportional to the size of each group's share of total industry sales.

  5. Build your own map Title of map goes here High Fill in the text boxes below with the information you’ve gathered in the previous slides. Adjust the size of the circles as needed and place them in the map. List strategic group members here Competitive factor #1 goes here Low List strategic group members here of Range factor Competitive factor #2 goes here List strategic group members here

  6. Review your new map In his book, Competitive Strategy, Michael Porter recommends these analytical steps: • Identify mobility barriers: Look at the qualities that protect each group from attack by other groups. This can help you to predict threats to the groups. • Chart directions of strategic movement: Draw arrows from each group that represent the direction in which the group seems to be moving in strategic space. • Predict reactions: Firms in the same group often react to an industry event in the same way. • Are there any “empty” areas on the map that you or one of your competitors could move into by revising an existing product or launching something new? • Could you improve your strategic position by moving to a different strategic group? • What advantages do your competitors have that you lack? Are they significant to your position on the map or not? Assess both the overall map and the position of each group. If there are more than two important competitive factors in your industry, you can draw additional maps to get a more complete analysis of your competitive environment.

  7. Learn more about competitive analysis These white papers and presentations on BNET.com review other techniques for competitive analysis and provide more background information. • Industry And Competitive Analysis • Your Competitive Analysis Expanded • How to do a Strategic Analysis • Company And Competition Did this help? Do you know more about competitive analysis than you did before you downloaded this file? Was this lesson too long or too short? Too detailed or not detailed enough? Send us your feedback and we’ll use your suggestions to improve Version 2.0 of our Competitive Analysis module.

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