Wednesday, July 4, 2007

COMPETITOR Analysis

In the market, someone creates a benchmark and the other try to outperform and set a new benchmark. Every game has its own rules. In a competition, either you try to create an image of your competitor’s product in a negative way or show your product in the most positive way. To highlight a small example, Coca Cola shows Pepsi as a drink for Children because it is sweet and the their product something for people who have a courageous heart with the tagline “Taste the Thunder”. To sustain, the most important move is to study the competitor. While formulating strategy for your own firm, you need to take a keen interest in your competitor’s strategies. In doing so, Competitor Analysis can be used as a method to gather information and understand the moves and behaviour of your competitor.

The most important aspect of Competitor Analysis is to understand your right competitors. In the market, a small start up software firm cannot decide to compete with Microsoft in the initial stages. While identifying your competitors, you need to understand your organizations and the objectives, which have been set for the organization in the coming five years. For example, if the organizations want to create a base in the Indian Market, then may be the particular software firm can see a company, which is existing in the market for 10years or so as a competitor. The point of discussion is to challenge the competitors who have a similar kind of organization like yours and caters the same kind of clients. And, if you decide to diverse then rather than competing its better to understand your competitors in a better way and learn from them. Remember, competition is not the first thing for survival. The thing, which is necessary, is to create a base, which means make the foundation strong and then attack your enemies. It’s also necessary to study how the strategic decisions of your companies affect your competitor. The parameters could be whether there is a fall in the market share of your competitor, or there is an increase or decrease in the brand value or there is no influence at all. It’s true that Intelligent Information can help in taking Intelligent Decisions. The Competitor’s current moves can be understood through its annual reports, press releases, and statement by the management, interview with analysts. The competitor’s moves can be understood by mergers and acquisitions, hiring activities, promotional campaigns, investments etc. The result of the Competitor Analysis should be used as an effective tool to influence your competitor to your firm’s advantage.