When formulating organization strategy, managers have to put in mind the strategies used by their competitors. As observed by Haag (2006) whereas in a highly fragmented commodity industry, any move by single competitor is insignificant. Analysis of competition is very significant when it comes to industries that are concentrated. The analysis helps in strategic planning.
There are two primary activities involved in competitor analysis. These are getting information about competitors who are important and using the acquired information to foretell a competitors behaviour. Analysis of a competitor helps to understand the types of competitors to compete with intended actions and strategies of a competitor reactions of a competitor towards the actions of a firm and how the behaviour of a competitor can be modified to benefit a firm.
According to Blenkhorn (2005), informal knowledge about behaviour of competitors is not sufficient in analyzing competitors. Instead, there is need for systematic analysis of competitors by use of intelligence gathering to bring together a wide scope of information to enable in the formation of strategy decisions which are well informed.
Literature review
The literature review is going to consist of analyses of previous studies that were done on competitor analysis specifically by use of primary and secondary academic sources. The main focus will be on competitor analysis along with important aspects affecting the analysis of competitors.
There is framework presented by Michael Porter which is used in analyzing competitors. The framework bases primarily on four key factors objectives of a competitor assumptions made by a competitor strategies laid by a competitor and the capabilities of a competitor (Blenkhorn, 2005).
The competitor is usually driven by objectives and assumptions, while the competitor uses capabilities and strategies to do his work. These four aspects are what constitute the competitor response profile. In the course of competitor analysis, one should consider vital competitors together with potential competitors for example the firms that are likely to join the industry. Extension of their present strategy or integrating them vertically is important.
What a competitor does and says are the two major sources to acquire information about the strategy of a competitor. The strategy of a competitor is revealed through yearly shareholder reports analysts interviews managerial statements and releases of the press (Blenkhorn, 2005).
Nonetheless, this strategy that is stated may differ from the actual activities that are carried out by the competitor. The direction of the cash flow is what shows the activities done by the competitor. These actions may include activity of hiring investments of capital campaigns of promotions strategic partnership and acquisitions and mergers.
According to a study carried out by Skyrme (1989), knowing objectives of a competitor assists in foretelling the reaction of the competitor to various competitive moves. For instance, a competitor who focuses financial goals that are short-termed might not be eager to use much money in giving response to a competitive attack. Instead, competitors of this nature might dwell much on commodities that hold positions that can easily be defended.
However, an organization that lacks profitability objectives that are short-termed might be eager to involve price competition that is destructive and does not benefit any of the firms.
Objectives of the competitor can be financial or otherwise. Some examples of these are growth rate shares of the market and leadership of technology. Every hierarchical plane of strategy may be associated with the set goals. These planes include unit of business, corporate and functional level.
The organizational structure of a competitor avails clues to which the role of an organization is lessened. For instance, those roles that report directly to the managing director are likely to be considered first compared to those that report to other administrators.
Other competitor factors that show the objectives are risk, incentives of management, tolerance, executives backgrounds, board of directors, composition contractual constraints and other corporate-level aims that may affect the competition. Meeting of the objective by the competitor may give a clear indication of the likelihood of changing his strategies.
Assuming that the managers of the competitors hold about their organization may assist in giving descriptions of the steps they are likely to take. For instance, if an organization came up with a new type of commodity in the past that failed, the executives of the organization may make an assumption that the market of the commodity is limited (Metayer, 1999).
Assumptions of this kind are never accurate at all times and opportunities might be presented if they are incorrect. For instance those firms which are entering the industry could come up with a commodity which is similar to the one that did not succeed without retribution because organizations which are incumbent may not take that as a serious threat. As an illustration of this, motorbikes which were manufactured by Honda Company found their way to the motorcycle market of the United States by using a small market because the motor bike manufacturers in the United States based on their past experiences to assume that small bikes had no market.
A competitor may base on a number of factors to come up with an assumption. These factors include believes concerning competitive positions a products past experience regional aspects trends of the industry and rules of thumb. Competitor analysis which is comprehensive may also consist of assumptions that are made among competitors (Haag, 2006).
According to the studies conducted by Blenkhorn (2005), a competitors response profile can be derived from analysis of their objectives, strategies, assumptions and capabilities. The profile can be used to reveal probable moves which a competitor might make. The profile comprises both probable defensive and offensive moves. Particular moves and their strength can be detected from the analysis.
Research Aims and Objectives
To find out how organizations and other firms carry out competition analysis in order to know the competitors strategies.
Research Methodologies
This research will use past studies on the subject to identify competitor analyses within organizations as well as firms. Secondary sources would be used and examined critically in order to identify the many assumptions made by various competitors and find out whether all the assumptions made are correct. In addition, the sources will recognize the dissimilarities between studies that were carried out in the past on competitor analysis and the research which is being conducted today.
Discussion
The present research entirely relies on the previous literature on studies concerning competitor analysis. The measures that are used directly asses the managers and directors competitiveness strategies. The present will add to the literature because minimal work has been done to evaluate specific strategies that are supposed to be laid by executives of organizations when dealing with competition. The results that were acquired from primary sources as well as secondary sources will be vital to realize major issues and tendency that may be observed.
From the findings, it can be concluded that knowledge of a competitors objectives and assumptions is very essential during competitors analysis. Organizations ad firms should assume that a commodity or product that failed in the past can totally fail to thrive in the present markets (Fuld, 1985).
There are two primary activities involved in competitor analysis. These are getting information about competitors who are important and using the acquired information to foretell a competitors behaviour. Analysis of a competitor helps to understand the types of competitors to compete with intended actions and strategies of a competitor reactions of a competitor towards the actions of a firm and how the behaviour of a competitor can be modified to benefit a firm.
According to Blenkhorn (2005), informal knowledge about behaviour of competitors is not sufficient in analyzing competitors. Instead, there is need for systematic analysis of competitors by use of intelligence gathering to bring together a wide scope of information to enable in the formation of strategy decisions which are well informed.
Literature review
The literature review is going to consist of analyses of previous studies that were done on competitor analysis specifically by use of primary and secondary academic sources. The main focus will be on competitor analysis along with important aspects affecting the analysis of competitors.
There is framework presented by Michael Porter which is used in analyzing competitors. The framework bases primarily on four key factors objectives of a competitor assumptions made by a competitor strategies laid by a competitor and the capabilities of a competitor (Blenkhorn, 2005).
The competitor is usually driven by objectives and assumptions, while the competitor uses capabilities and strategies to do his work. These four aspects are what constitute the competitor response profile. In the course of competitor analysis, one should consider vital competitors together with potential competitors for example the firms that are likely to join the industry. Extension of their present strategy or integrating them vertically is important.
What a competitor does and says are the two major sources to acquire information about the strategy of a competitor. The strategy of a competitor is revealed through yearly shareholder reports analysts interviews managerial statements and releases of the press (Blenkhorn, 2005).
Nonetheless, this strategy that is stated may differ from the actual activities that are carried out by the competitor. The direction of the cash flow is what shows the activities done by the competitor. These actions may include activity of hiring investments of capital campaigns of promotions strategic partnership and acquisitions and mergers.
According to a study carried out by Skyrme (1989), knowing objectives of a competitor assists in foretelling the reaction of the competitor to various competitive moves. For instance, a competitor who focuses financial goals that are short-termed might not be eager to use much money in giving response to a competitive attack. Instead, competitors of this nature might dwell much on commodities that hold positions that can easily be defended.
However, an organization that lacks profitability objectives that are short-termed might be eager to involve price competition that is destructive and does not benefit any of the firms.
Objectives of the competitor can be financial or otherwise. Some examples of these are growth rate shares of the market and leadership of technology. Every hierarchical plane of strategy may be associated with the set goals. These planes include unit of business, corporate and functional level.
The organizational structure of a competitor avails clues to which the role of an organization is lessened. For instance, those roles that report directly to the managing director are likely to be considered first compared to those that report to other administrators.
Other competitor factors that show the objectives are risk, incentives of management, tolerance, executives backgrounds, board of directors, composition contractual constraints and other corporate-level aims that may affect the competition. Meeting of the objective by the competitor may give a clear indication of the likelihood of changing his strategies.
Assuming that the managers of the competitors hold about their organization may assist in giving descriptions of the steps they are likely to take. For instance, if an organization came up with a new type of commodity in the past that failed, the executives of the organization may make an assumption that the market of the commodity is limited (Metayer, 1999).
Assumptions of this kind are never accurate at all times and opportunities might be presented if they are incorrect. For instance those firms which are entering the industry could come up with a commodity which is similar to the one that did not succeed without retribution because organizations which are incumbent may not take that as a serious threat. As an illustration of this, motorbikes which were manufactured by Honda Company found their way to the motorcycle market of the United States by using a small market because the motor bike manufacturers in the United States based on their past experiences to assume that small bikes had no market.
A competitor may base on a number of factors to come up with an assumption. These factors include believes concerning competitive positions a products past experience regional aspects trends of the industry and rules of thumb. Competitor analysis which is comprehensive may also consist of assumptions that are made among competitors (Haag, 2006).
According to the studies conducted by Blenkhorn (2005), a competitors response profile can be derived from analysis of their objectives, strategies, assumptions and capabilities. The profile can be used to reveal probable moves which a competitor might make. The profile comprises both probable defensive and offensive moves. Particular moves and their strength can be detected from the analysis.
Research Aims and Objectives
To find out how organizations and other firms carry out competition analysis in order to know the competitors strategies.
Research Methodologies
This research will use past studies on the subject to identify competitor analyses within organizations as well as firms. Secondary sources would be used and examined critically in order to identify the many assumptions made by various competitors and find out whether all the assumptions made are correct. In addition, the sources will recognize the dissimilarities between studies that were carried out in the past on competitor analysis and the research which is being conducted today.
Discussion
The present research entirely relies on the previous literature on studies concerning competitor analysis. The measures that are used directly asses the managers and directors competitiveness strategies. The present will add to the literature because minimal work has been done to evaluate specific strategies that are supposed to be laid by executives of organizations when dealing with competition. The results that were acquired from primary sources as well as secondary sources will be vital to realize major issues and tendency that may be observed.
From the findings, it can be concluded that knowledge of a competitors objectives and assumptions is very essential during competitors analysis. Organizations ad firms should assume that a commodity or product that failed in the past can totally fail to thrive in the present markets (Fuld, 1985).
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