Presentation made for StartMeUp Ryerson November 11 th 2010 Marla Spergel COMPETITIVE INTELLIGENCE KNOWLEDGE IS POWER- SIR FRANCIS BACON

WHAT IS COMPETITIVE ANALYSIS Competitor Analysis is an important part of the strategic planning process. This revision note outlines the main role of, and steps in, competitor analysis "Competitive Intelligence is critical to gain and maintain a competitive edge. Through proactive CI efforts, strategic and tactical agility can be improved to outperform, outmaneuver and outsmart the competition." - Bill Tyson

Concerns of an Org.’s competitive analysis (2) 2. How can our competitors be grouped meaningfully? Different characteristics for identifying Strategic groupings Figure 20.8 Source : Adapted from Wilson et al. (1992).

PORTERS 5 COMPETITIVE FORCES

WHY BOTHER TO ANALYSE COMPETITORS? To help management understand their competitive advantages/disadvantages relative to competitors To generate understanding of competitors’ past, present (and most importantly) future strategies To provide an informed basis to develop strategies to achieve competitive advantage in the future To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?

QUESTIONS TO ASK Who are our competitors? (see the section on identifying competitors further below) What threats do they pose? What is the profile of our competitors? What are the objectives of our competitors? What strategies are our competitors pursuing and how successful are these strategies? What are the strengths and weaknesses of our competitors? How are our competitors likely to respond to any changes to the way we do business?

SOURCES OF INFORMATION FOR COMPETITOR ANALYSIS Recorded data: this is easily available in published form either internally or externally. Good examples include competitor annual reports and product brochures; Observable data: this has to be actively sought and often assembled from several sources. A good example is competitor pricing; Opportunistic data: to get hold of this kind of data requires a lot of planning and organisation. Much of it is “anecdotal”, coming from discussions with suppliers, customers and, perhaps, previous management of competitors.

RECORDED DATA Annual report & accounts Press releases Newspaper articles Analysts reports Regulatory reports Government reports Presentations / speeches

OBSERVABLE DATA Pricing / price lists Advertising campaigns Promotions Tenders Patent applications

OPPORTUNISTIC DATA Opportunistic Data Meetings with suppliers Trade shows Sales force meetings Seminars / conferences Recruiting ex-employees Discussion with shared distributors Social contacts with competitors

WHAT BUSINESSES PROBABLY ALREADY KNOW THEIR COMPETITORS verall sales and profits Sales and profits by market Sales by main brand Cost structure Market shares (revenues and volumes) Organisation structure Distribution system Identity / profile of senior management Advertising strategy and spending Customer / consumer profile & attitudes Customer retention levels

WHAT BUSINESSES WOULD REALLY LIKE TO KNOW ABOUT COMPETITORS Sales and profits by product Relative costs Customer satisfaction and service levels Customer retention levels Distribution costs New product strategies Size and quality of customer databases Advertising effectiveness Future investment strategy Contractual terms with key suppliers Terms of strategic partnerships

A COMPETITIVE ANALYSIS ON PEPSI MAX TASKS: Based on the facts provided below, please provide: What threats does Pepsi Max pose to Coke Zero? What is the profile of Pepsi Max? What are Pepsi Max objectives? What strategies are they using and how successful are these strategies? What are their strengths and weaknesses?