UNIT – 1: ANALYZING MARKET SITUATION AND

COMPETITOR’S STRATEGIES
STRUCTURE

1.0 Learning Objectives

1.1 Introduction
1.2 Analysis of Market Situation
1.2.1 Market Analysis- An Overview
1.2.2 Purpose for analyzing the Market Situations
1.2.3 The 5 Cs of Market Situation Analysis is as follows
1.2.4 SWOT Analysis
1.2.5 Advantages of Market Analysis
1.2.6 Disadvantages of Market Analysis
1.2.7 Internal Market Situation Analysis
1.2.8 External Market Situation Analysis
1.2.9 Other Methods of Market Situation Analysis
1.2.10 Design of Market Situation Analysis

1.3 Analysis of Competitor Strategies

1.3.1 Understanding the Competitors
1.3.2 Importance of analyzing competitor strategies:
1.3.3 Different types of Competitors
1.3.4 Elements of Competitors analysis
1.4 Estimating competitor’s reaction pattern and competitive position.
1.4.1 Competitors based on reaction patterns
1.4.2 Competitors Competitive Position.
1.4.3 Principles of competitive positioning
1.5 Summary
1.6 Keywords
1.7 Learning Activity
1.8 Unit End Questions
1.9 References
1.0 LEARNING OBJECTIVES

After studying this unit, you will able to:

 Purpose of market situation analysis.

 Analyze the market condition and requirement.
 Advantages of analyzing situation of market.
 Who the competitors are?
 Analyze the competitor’s strategies.
 Study the reaction pattern of competitors
 Competitive position

2.0 INTRODUCTION

We've come across the terms market and marketing many times in business world. Both
are similar sounding terms and refer to the same topic. 'Market' and 'marketing,' on the other
hand, are two distinct concepts that are related to one another. Market evaluation and situation
analysis give you a "road map" to help you make better decisions as you carry out your market
development strategies. Marketing research is the function that connects the consumer, customer,
and general public to the marketer through information that is used to identify and define
marketing opportunities and problems, generate, refine, and evaluate marketing actions, track
marketing performance, and improve understanding of marketing as a process. While developing
the market strategy it is necessary to do market research. Market research is the process of
acquiring, analyzing, and interpreting data in order to assist in the resolution of marketing
problems. We employ market research for a variety of reasons. It assists us in making informed
decisions, such as establishing the feasibility of introducing a new product before investing time
and money into it. With market situation analysis it is important to analyze the competitor’s.
Competitive market research focuses on identifying and analyzing key market indicators that
might help you distinguish your products and services from those of your competitors.
Comprehensive market research lays the groundwork for a successful sales and marketing plan
that sets your firm apart from the competition.

Marketing as a commercial discipline is a relatively new development. Exchanges have occurred

throughout history, from the period of barter to the contemporary complicated marketing system.
Over decades, marketing concepts have evolved significantly. Even after marketing was elevated
to the status of a full–fledged business discipline.

More than any other corporate activity, marketing is concerned with the client. It is centred on
the consumer. Establishing relationships based on the perceived worth of the consumer and
Many individuals believe that marketing is synonymous with selling and advertising. And it's
understandable — we're inundated with television advertising, newspaper advertisements, direct
mail offers, sales calls, and online solicitations on a daily basis. However, selling and advertising
are merely the tip of the iceberg when it comes to marketing. They are two of several marketing
roles and are frequently not the most critical. There are two marketing principles that provide us
with a comprehensive understanding of marketing. They are as follows:

A) The conventional marketing idea.

B) Contemporary marketing idea

Marketing, in the conventional sense, refers to the activities that result in the transfer of
ownership of commodities and the management of their physical distribution. It encompasses all
operations aimed at ensuring the flow of products and services from producers to consumers, as
well as those aimed at the establishment of time, place, and possession utilities. However,
marketing as a modern idea is more than a physical process or collection of actions. It embodies
a distinct corporate concept that has arisen in recent years: customer creation. Here, the client is
both the catalyst and the objective of all marketing activity. Marketing is concerned with
determining and satisfying personal and social needs. It is defined as profitably addressing
customer demands. Customer creation entails identifying consumer wants and developing the
firm to suit them. In other words, a business takes deliberate and coordinated attempts to
ascertain what the community's members need and how it may best provide those requirements.
It generates what the customer demands, in the quantity required, at a price the consumer is
willing to pay for the satisfaction delivered in the form of goods and services, via channels that
meet the consumer's need for goods and services. Thus, the current philosophy of marketing is
centred on the consumer and his or her delight. As a result, it is referred regarded as a consumer-
oriented idea. Satisfaction is important to contemporary marketing. The pricing methods used,
the promotional techniques used, the design, shape, and size of the product, and the location of
sales are all determined after researching the customers' lifestyles, cultures, purchasing
behaviours, and media consumption habits, among other things.

Marketing brings together manufacturers and customers for mutual gain. Production is pointless
if the things created are not distributed to customers via an effective marketing strategy. When
we look around, we see marketing in the advertising that fill our television sets. brighten our
periodicals, fill our mailboxes, and provide life to our online sites. At home, at school, at play,
and at work. We encountered marketing in nearly everything we do. All of this is facilitated by a
vast network of people and activities vying for our attention and dollars.

Marketing management analysis is the process of a company's marketing components being

decided, planned, and controlled in terms of the marketing idea, somewhere inside the marketing
system. Before delving into some of the process's finer points, some background on two points
will be useful.

The marketing notion is easy in theory, but putting it into practice is sometimes difficult, if not
impossible. The above-mentioned comment by Adam Smith is most congruent with it. The idea
is that if a corporation openly integrates the many components of its marketing operations in
order to suit the preferences of its consumers, it may more successfully fulfil its own aims.

To someone who is inexperienced with corporate practice, the necessity for adopting the notion
and the ability to do so appear to be so self-evident that they don't need to be discussed.

Within the marketing system, this marketing management process takes place "somewhere."
After seeing the marketing system shown, you realize that "somewhere" may be any of the many,
many enterprises that make it up—manufacturing, wholesaling, and retailing. Every single one
of them employs marketing management.

Assume, for simplicity's sake, that we're just interested in the manufacturing level in the sense
that the manager we're looking at works in a marketing management job there.

Situation analysis requires an examination of an organization's internal environment, or

microenvironment. The state of an organisation, whether it is a business or any other sort of
organisation.

The internal and external dynamics of an organisation are expressed in terms of its internal and
external dynamics. environmental variables When both forms of data are analysed, a conclusion
is reached. management can have a thorough grasp of the internal and external surroundings the
organization's overall situation When it comes to the external world, Factors that exist outside of
the organisation are [Link] exterior circumstances, as well as the interior environmental
elements, depict the internal [Link] organization's circumstances Internal environmental
analysis can be [Link] determine an organization's internal strengths and
shortcomings. In terms of numerous internal environmental elements, the organisation. Each
factor in various sections of the organisation is investigated.

The hard truth of today's more competitive marketplace cannot be avoided. Every customer that
a company wants to recruit is a competitor. The company competes for the attention and
engagement of customers. It competes for their time and attention during the purchasing process.
It fights for consumers' willingness to cope with the technological complexity inherent in many
goods and the resulting demand for services, as well as the dollars they are prepared to pay on a
product or service. A terrific concept or a distinctive product are not prerequisites for successful
consumer marketing.

Consumers who desire or need the goods and have the financial means to purchase it are the
starting point for marketing. These customers, on the other hand, don't just buy a product; they
buy a market offering, which is a collection of values. A product, product services, transaction
services, brand, packaging, pricing, credit terms, price reductions, advertising, personal sales
help, shop or company location availability, inventory selection, and transportation services are
all part of that market offering. The key problem for the marketing executive in building a
successful competitive position in the European consumer marketplace today is combining and
matching these many parts of the market offering into an adequately integrated and unified
whole.

But, before any of this can happen, the company must compete for the attention of customers and
establish a recognisable comparative position in their thoughts that is consistent with their
cultural background.

1.2 Analysis of Market Situation

1.2.1 Market Analysis- An Overview

A market analysis is a quantitative and qualitative valuation of a market. The aim of market
analysis is to recognize the important characteristics of a market and to find out the market
structure at a certain point in time. Analyzing the market situation can help you to understand
your target audience and the conditions of the market.  This can help you to differentiate yourself
from the competition and be distinct you in a crowded market. A market analysis
provides information about other industries, customers, your competitors, and other market
variables.  Market situation analysis involves assessment of the situation and trends in a specific
market. If you are in the process of business planning and to launch a new product in a market,
you need to assess the situation in that market. The purpose of this is to help the business
determine the areas where marketing efforts are most needed, and to enable you to make your
business plans and implement them accordingly. Market Situation Analysis should be based on
cold, hard, verifiable facts.
The 'where are we now' situation analysis or audit is a method for a corporation to determine its
own strengths and weaknesses in relation to external opportunities and dangers. As a result, it is
a method of assisting management in choosing a position in that environment based on existing
facts.

A company's external environment encompasses a wide range of factors. The environment is said
to be divided into two parts: the macro-environment and the micro-environment. Social, cultural,
legal, economic, political, and technical elements make up the macroenvironment. Strategic
marketing planning is critical in order to design the most appropriate marketing strategy to build
and sustain Shloer in a continuously changing marketplace, taking into account elements such as
demography, green concerns, and bigger societal and environmental challenges.

Both the company's internal environment (controllable factors affected by management) and the
external environment in which it works (uncontrollable variables management cannot influence)
must be investigated, as shown. The information gathered is then organised and evaluated using
the SWOT analysis, which matches the company's vulnerabilities and strengths to the risks and
opportunities it faces in the environment. As a result, the firm may build on its strengths,
mitigate any weaknesses, seize market opportunities as they emerge, and avoid any threads as far
as conceivable pressures are considered. Other environmental restrictions, such as market
structure, suppliers, consumers, market trends, public, and competition, are included in the
Micro-environment.

The internal environment, which includes an evaluation of the company's marketing mix
(product, price, site, promotion) and service mix (people, process management, physical
evidence), is also critical. Other criteria covered in an internal environment analysis include
sales, profitability, market share, and customer loyalty.

Internal auditing studies a company's own resources and makes recommendations on its
strengths and deficiencies. Internal factors are mostly under the control of the firm, and as a
result, organizations should make every effort to avoid any difficulties that may arise as a result
of them. Internal organizational competencies are clearly demonstrated to be important in
product creation and strategic formation.

After taking into account both internal strengths and weaknesses as well as external
environmental effects (opportunity and dangers), every organization is in a position to design an
efficient marketing plan. Failure to comprehend both external and internal capacities may result
in total failure.

The following dimensions are commonly used in market analysis:

 1. Market size (actual and potential): The size of important submarkets; the prospective
market includes the use gap.
2. Market growth rate: The forces that drive sales, as well as growth rate projections. 3.
3. Profitability of the market: Existing rivals, supplier power, customer power, replacement
products, and potential entrants all influence the level of competition.
4. Cost structure: Examine the value added by the production stage and track how it changes
over time, as well as the impact of the learning curve.
5. System of distribution
6. Developments and trends
7. Critical success factors: What abilities and competences are required today and in the
future to compete?
8. The market's competitive nature: the type of competition among current enterprises,
whether new entries or the availability of substitute products pose a danger, and how
influential consumer and supplier groupings are.

Fig: 1.2.1 Market Analysis

1.2.2 Purpose for analyzing the Market Situations:

Before enlarging a marketing strategy, it is important to conduct a market situation analysis to

determine the health of your business. This analysis serves as a helpful tool for determining your
business's strengths and weaknesses, and any opportunities and threats (SWOT) which may
affect its health. The results can be eye-opening in terms of what's truly going on in your
company and can aid in determining your company's market strategy. An analysis can reveal
where your company is in the present market, what is working, what can be improved, and where
possibilities to profit and develop exist. Develop a marketing plan, find market gaps your
company can fill, advance new technology, and respond to rival changes using a scenario
analysis. Adapt the report as needed to get the results you want.

1.2.3 The 5 Cs of Market Situation Analysis is as follows:

The following are the four primary factors to consider when assessing the current market
situation:

 Company – This is an examination of the business or company's internal workings, such

as its short- and long-term aims and objectives. It also looks at the company's strengths
and shortcomings, as well as its market share.

Fig: 1.2.3 5 C’s of Marketing

 Consumer – Because this time the focus is on the customer, demographics such as type,
number, age, and so on will be examined. It will dig even further, considering the value
drivers that motivate customers to behave in a certain way. The investigation will also
examine into the decision-making processes of the participants in the study.
 Competitor – Because competition is an important part of any firm, it is necessary to
incorporate it in the market condition study. The company's and its shares' market
 positions will be compared to those of competitors in this examination. It will also have
to determine the competitors' strengths and shortcomings.
 Collaborators - In addition to the company and its competitors, there are a number of
additional parties who play an important, if indirect, role in the company's activities.
Other players such as distributors, suppliers, consultants, subsidiaries, and joint ventures,
to name a few, are among the collaborators.
 Climate - When assessing the climate, concentrate on external elements that may have an
impact on how you do business. Industry trends, societal trends, legal trends, and new or
developing technology will all be discussed.

1.2.4 SWOT Analysis:

Fig: 1.2.4 SWOT Analysis

It also contains a business, i.e. its strengths, weaknesses, opportunities and the threats that it
faces.  

 Strength: Strength is referred to all the positive contributions to the favorable result of an
organization. These contributing aspects can be tangible or immaterial, but they must be
under the company's control. Human resources, capital resources, infrastructure, brand
recognition, and other factors should all be taken into account.
 Weaknesses: Weaknesses are defined as any internal elements that prohibit an
organization from attaining its goals. In other words, the factor which may jeopardize the
 success of the company is a weakness. For example, employees can be the greatest asset
of company if they are skillful, well-trained, and motivated to their job. On other side,
workers without ample skills and motivation will be a big obstacle for the company to
reach the top position. Similar to strengths, there are some elements that should be
reviewed to find out weaknesses as early as possible.
 Opportunity: An opportunity is defined as an external factor that has a favorable impact
on or contributes to a company's success. For example, if you're an online retailer, the
rise of mobile devices is a boon to your business's ability to expand and earn consumer
recognition.
 Threat: Threats are external factors that exist as disadvantages, requiring businesspeople
to devise effective strategies for dealing with them or change their plans to overcome
these obstacles. For example, a rapid economic downturn may pose a challenge for
businesses, as they will have to work harder to get people to consume their goods. Some
hazards even cause businesspeople to abandon their plans to attain certain objectives.

1.2.5 Advantages of conducting Market Analysis:

A marketing study can help you manage risk, spot developing trends, and forecast income. You
may utilize a marketing analysis at various stages of your business, and it's even a good idea to
do one once a year to stay on top of any important market changes. A thorough market study is
frequently included in a business plan since it helps you gain a better understanding of your
target audience and competitors, allowing you to develop a more targeted marketing approach.

Other significant advantages of completing a market analysis include:

 Risk reduction: Knowing your market may help you decrease business risks since you'll
have a better awareness of important market trends, key industry players, and what it
takes to succeed, all of which will inform your business decisions.
 Targeted products or services: When you know exactly what your customers want from
you, you'll be in a far better position to serve them. You may utilize this information to
adjust your business's offerings to your consumers' demands once you know who they
are.
 Emerging trends: Being the first to discover a new opportunity or trend is a key part of
staying ahead in business, and employing a marketing analysis to remain on top of
industry trends is a wonderful way to position you to take advantage of this knowledge.
 Market forecasts: A market prediction is an important part of most marketing
assessments since it predicts future numbers, attributes, and trends in your target market.
This provides you an estimate of how much money you'll make, allowing you to change
your company plan and budget accordingly.
 Benchmarks for evaluation: Outside of basic metrics, it can be tough to assess your
company's success. A market study gives standards against which you can assess your
firm and how well it is performing in comparison to the competition.
 Marketing analytics: Marketing analytics can provide context for prior blunders and
industry abnormalities in your company. In-depth analytics, for example, can explain
what factors influenced a product's sale or why a certain statistic performed the way it
 did. Because you'll be able to examine and define what went wrong and why, you'll be
able to prevent repeating the same mistakes or encountering similar anomalies in the
future.
 Marketing optimization: An annual marketing study may help you with this because it
can guide your continuing marketing efforts and show you which elements of your
marketing require improvement and which are functioning well in comparison to other
companies in your sector.
 Marketing Environment: Successful marketers are those who can direct their
organizations through the unstable marketing environment, and do it better than
competitors. In marketing and strategic management, competitive analysis is an
evaluation of present and potential competitors' strengths and weaknesses.  To identify
opportunities and risks, this analysis gives both an offensive and defensive strategic
perspective.

1.2.6 Disadvantages of Market analysis

A marketing analysis examines the marketplace and determines where you might fit in. This
might assist your small firm in making strategic decisions. While a marketing study has apparent
benefits in terms of assisting you in identifying new customers and devising ways to reach them,
it also has drawbacks.

 Misinterpretation of Market Needs: Identifying the needs of each market segment is

one of the parts of your marketing analysis. Other firms and products that are aiming to
meet the demands of this market are also identified. There are two drawbacks to doing so.
You may overestimate your competition's ability to meet customers' wants and give up
before even attempting selling. You could potentially misidentify the need being met.
Don't forget to consider the distinctiveness of your own product. Just because your
competitors desire the same customer as you, doesn't mean you're meeting the same
demand.
 Assessing Market Growth in the Absence of Market Share: Your marketing research
will involve a look at how the entire market is growing, which can help you gauge your
options. However, if your analysis makes you feel discouraged, this can be a negative. If
you capture market share, you may compete successfully in a small market. An
examination of the market's size alone will not reveal your opportunities. A slow-growing
market can be compensated for by increasing market share.
 Target Markets vs. Market Segmentation: You must determine which market
categories contain potential buyers for your products or services. This will assist you in
comprehending the various tactics you may need to use in order to target various types of
customers. The disadvantage is that you can end up spreading yourself too thin. Few
companies can afford to market to each and every possible customer. Choose a target
market from among the available segments and go after it with a laser-like focus.
  Improper Data Interpretation: The quality of a marketing analysis is determined by the
analyst. Market surveys can yield a lot of information, but effectively analyzing that
information is crucial. If you misread information and make decisions based on that
misconception, you will be at a severe disadvantage. Run your findings by a few of
reliable advisors. Make certain that your analysis isn't based on wishful thinking.
 Expensive to Conduct Research: One of the biggest factors that deter businesses from
conducting market research is the high costs involved. Knowing how much goes into
Market Research can be rather overwhelming for firms that are just getting started.
Unfortunately, it will be like taking a dull knife to a gunfight without Market Research.

1.2.7 Internal Market situation analysis

 Merry down PLC was founded in 1946 as a cider maker in Heathford, East Sussex. In the
early 1990s, it purchased Shloer manufacturing and was the first firm to import alcopops,
in the shape of Two-Dogs, into the UK. Due to increased competition in the alcopops
market, the firm lost £516,000 in pre-tax profits in 1997 and handed distribution of Two
Dogs to Scottish and Newcastle.
 In 1999, the company rebranded itself as Shloer, which boosted its soft drink market
performance. Sales grew in 2001 as a result of the company's current successful strategy
of increasing the size and frequency of existing customers' purchases while also
introducing new consumers to the brand through efficient marketing communications.
 While the firm continues to make traditional ciders, it is hoping to profit from Shloer's
recent popularity. It explores possibilities that will boost growth for the long-term benefit
of shareholders by sticking to its original 40-year-old formula of natural fruit juices and
water.

Performance

Profitability and Sales

Merrydown PLC's overall financial performance has improved during the previous five years.
Table 1 indicates that between 2000 and 2001, the company's revenues climbed by 12% to
£17.63 million, while pre-tax profit increased by 41% to £1.05 million. Earnings per share
climbed by 86 percent to £2.92, with final dividends increasing to £0.75 in the company's favour,
while net cash increased to £2.80 million, enhancing liquidity. In addition, the firm has a £3
million committed overdraft to cover all projected working capital needs and allow room for
future developments.
Increased Shloer sales, which surged by 47 percent to £8.5 million the previous year, contributed
significantly to the improved sales performance in 2001. Shloer is presently at the maturity stage
of its product life cycle, despite its rapid sales growth. The Product Life Cycle (PLC) idea
highlights four different periods in a product's sales history, known as Introduction, Growth,
Maturity, and Decline, and shows how profits grow and decline at each step. The idea serves as a
great tool for evaluating the brand's current and future orientation. By determining where it is in
its life cycle, relevant solutions for dealing with possible dangers and opportunities in that stage
may be identified (Brassington and Pettitt, 2001).

Shloer's product life cycle depicts how sales and profitability have evolved through time and are
likely to continue to do so in the future. Low sales growth and fragmented marketplaces
characterise the mature stage, as established rivals strive to obtain a competitive edge in specific
areas. Recent methods have mirrored those recommended at this level of the PLC. Product
modification tactics, such as expanding the selection of flavours, package design, and size, have
previously been used to relaunch Shloer in order to increase sales volumes. Market modification
techniques, such as promoting new and varied applications through recipes and drinking
situations, have effectively improved sales by drawing new customers to the brand and
motivating existing customers to buy more Shloer in the future.

Share of the Market

Shloer's market performance has improved over the previous three years, with a 1.5 percent gain
in its value share of the adult soft drinks market. Shloer is now being purchased by 7.7% of all
households, indicating that the brand has significant development potential.

Customer loyalty is important.

Over the previous three years, the firm has been able to increase Shloer's loyalty. In 2000,
independent research found a strong favourable response to the company's new branding, as well
as high levels of consumer recognition and satisfaction. Summer sales have also grown, although
they are still at their peak during the Christmas season.

Customer loyalty is divided into six categories, according to Wind (1982):

1. Existing customers who will continue to buy the brand.

2. Existing consumers who may switch brands or cut back on their use.

3. Occasional users who, given the correct incentives, may be convinced to expand their usage.

4. Occasional users who may reduce their use as a result of competing products.
5. Non-users who could consider purchasing the brand if it is changed.

6. Non-users who have strong unfavourable sentiments about the product and are unlikely to
change their minds.

The bulk of Shloer's existing clients fit into groups 3 and 4 (occasional users). As a result,
competitors' comparable goods might erode their loyalty to Shloer, signalling that resources
should be put in a targeted marketing mix to convert them into heavy users.

Positioning

Shloer is marketed as a grown-up soft drink in the adult soft drink market, with a focus on ladies
over the age of 25. The Mc Kinsey Matrix may be used to illustrate its current market position in
order to analyse the current strategy based on its business strength in terms of key performance
indicators and market competitive dynamics.

Figure 3 shows a model that takes into account two dimensions: market attractiveness for
competitors (in terms of cash flow, market size, sales growth rate, competition, and so on) and
business strengths relative to competitors (in terms of company size, growth, marketing
capability, market share, customer loyalty, and so on). Three zones have been established, each
implying a distinct marketing strategy. When the firm's position and market attractiveness are
both good, the company should most likely spend and try to grow. Zone 3 has a more pessimistic
outlook and suggests that either harvesting or divestiture techniques be adopted. Zone 2 denotes
that just a few investment decisions should be made if there are special grounds for doing so
(Aaker, 1998).

Shloer is roughly in Zone 1 and is represented by the letter X. Because of the industry's maturity,
the degree of market attractiveness is predicted to decline during the following three years, as
shown by the arrow. Indicating that resources should be directed to investing in the near future
for future growth.

Planning

The corporation is devoted to investing extensively in marketing operations and has a long-term
vision of Shloer's brand growth. In the year 2000, more staff were hired in marketing, category
management, and sales strategy, and production and brand management teams were separated
into distinct operating divisions to focus management resources on these major operations.
Furthermore, all marketing efforts are placed along the M25, a significant traffic artery, to allow
clients and agencies convenient access.

Marketing Combination
Product

Shloer is a beverage made from premium fruit juice (about 55%) and carbonated water, with
vitamin C and no artificial sweeteners or preservatives. In April 1999, it was relaunched. to allow
growth with a wider selection of flavours and more modern packaging within new commercial
channels It's now available in a 1-liter glass container as well as a single-serve 275ml glass
bottle. red grape, white grape, raspberry & cranberry, white grape & peach, white grape & peach,
white grape & peach, white grape & peach, white grape & peach, white grape & peach, white
grape & peach, white grape white grape & elderflower, and grape & apple A flask-shaped 330ml
silver wrapped flask is also included. Shloer2gO was introduced in 2000 and comes in three
flavours: orange & lemon, apple, and grapefruit, as well as exotic fruits, to appeal to impulsive
purchasers. Since 1999, capital investment in plant and equipment, as well as bottling operations,
has kept systems running smoothly. up to date, and high capacity and manufacturing standards
were maintained. An honourable distinction winning the Gold Award from the British Retail
Consortium in 2000. Place Shloer is distributed throughout the UK by SHS Sales and Marketing
Ltd in supermarkets and off licences. as well as pubs. Merrydown PLC has established a good
working connection with the firm. SHS invested in extra resources in the year 2000 to improve
their administration and [Link] accounts on their behalf, in order to assist in
the expansion of distribution within the Irish Republic

 .Price Shloer demands a premium price in line with its present image, with prices ranging
from £2 to £3. a one-liter bottle However, robust competition precludes price hikes from
compensating promotional expenditures. Promotion Since 2000, support for the brand has
more than quadrupled, according to the present approach. A total of £2 million was spent
on advertising and marketing. In 2001, pull-strategies were prioritised in order to
illustrate Shloer's value to customers directly, with the help of a few well-targeted trade
promotions. promotions. Shloer is marketed as "the adult soft drink" that is "sparkling,
refreshing, and more than a little bit fruity" in television and print advertisements. The
brand is marketed as being excellent for people who are looking for a unique way to
express themselves. Summer days are hazy and lethargic, perfect for lounging in the
garden with friends and as a self-indulgent adult refreshment ([Link]).
Commercials aired on GMTV and Channel 4 starting in November. 5, in combination
with advertisements in Hello, the BBC Good Food Guide, and Elle for women's
magazines, In-store marketing, sampling, and PR events, such as the Shloer garden at the
Chelsea Flower Show, were also sponsored.
1.2.8 External Market situation analysis

Market Structure in the Micro Environment

The adult soft drink market accounts for 8% of overall soft drink volume and 7% of total soft
drink value.

It's further divided into clear & flavoured carbonates, flavoured waters, fruit drinks, herbal
drinks, RTD iced tea, and coffee sectors based on the kind of drink. Furthermore, clear and
flavoured carbonates are the most popular, accounting for 57 percent of the market (Mintel,
2002).

The following are some of the newer categories that have been identified:

Organic beverages are those that have been certified by a recognised authority, such as the Soil
Association, and have had their manufacturing, processing, packaging, and labelling inspected
on a regular basis.

Competition

3) Competitors in the Market – Other fizzy fruit-flavored drinks marketed at the adolescent
market, such as Tango, 7up, and Lilt, include lesser quantities of fruit concentrate and sparkling
mineral waters.

4) Implicit Competitors — Different drinks, such as hot beverages, alcoholic beverages, and
other carbonates such as Coca-Cola and Pepsi, compete for the same percentage of the adult
consumer's disposable money.

Figure 6 compares and contrasts the strengths and disadvantages of immediate competitors.
Shloer Doyle emphasises the need of studying direct rivals, also known as the strategic group,
because they all target the same market sectors and have comparable objectives. It's also crucial
to be aware of any unintentional competitors who may be selling items, since they might
represent a serious danger to the brand.

There are many competing items on the market, which may be divided into three categories.

four categories are depicted in the diagram

The model highlights five dynamics that influence a product's competitive position in the market:
(1) threat of new entrants, (2) buyer bargaining power, (3) supplier bargaining power, (4) threat
of replacement products, and (5) rivalry among current rivals.

Suppliers

Despite the large number of providers in the market, Britvic Soft Drinks Ltd leads supply, having
the largest share of both volume and value, as seen in Tables 4 and 5.

Furthermore, own-label merchants like Tesco, Sainsbury's, and Boots provide a major
percentage of the drinks.

Low in calories and sugar – Slowly increasing as customers choose healthier lives.

Tables 2 and 3 demonstrate that the adult soft drink market grew overall between 1999 and 2001,
with all categories losing market share and sales to the clear carbonates sector, which rose by
264 percent in volume and 236 percent in value.

Between 2001 and 2006, the market is expected to expand by 20% in real terms, reaching a
market value of £822 million in 2006, with volume sales expected to climb by 29%.

Market Structure in the Micro Environment

The adult soft drink market accounts for 8% of overall soft drink volume and 7% of total soft
drink value.

It's further divided into clear & flavoured carbonates, flavoured waters, fruit drinks, herbal
drinks, RTD iced tea, and coffee sectors based on the kind of drink. Furthermore, clear and
flavoured carbonates are the most popular, accounting for 57 percent of the market (Mintel,
2002).

The following are some of the newer categories that have been identified:

Organic beverages are those that have been certified by a recognised authority, such as the Soil
Association, and have had their manufacturing, processing, packaging, and labelling inspected
on a regular basis.

Competition
3) Competitors in the Market – Other fizzy fruit-flavored drinks marketed at the adolescent
market, such as Tango, 7up, and Lilt, include lesser quantities of fruit concentrate and sparkling
mineral waters.

4) Implicit Competitors — Different drinks, such as hot beverages, alcoholic beverages, and
other carbonates such as Coca-Cola and Pepsi, compete for the same percentage of the adult
consumer's disposable money.

Figure 6 compares and contrasts the strengths and disadvantages of immediate competitors.
Shloer Doyle emphasises the need of studying direct rivals, also known as the strategic group,
because they all target the same market sectors and have comparable objectives. It's also crucial
to be aware of any unintentional competitors who may be selling items, since they might
represent a serious danger to the brand.

There are many competing items on the market, which may be divided into three categories.

four categories are depicted in the diagram

The model highlights five dynamics that influence a product's competitive position in the market:
(1) threat of new entrants, (2) buyer bargaining power, (3) supplier bargaining power, (4) threat
of replacement products, and (5) rivalry among current rivals.

Suppliers

Despite the large number of providers in the market, Britvic Soft Drinks Ltd leads supply, having
the largest share of both volume and value, as seen in Tables 4 and 5.

Furthermore, own-label merchants like Tesco, Sainsbury's, and Boots provide a major
percentage of the drinks.

Low in calories and sugar – Slowly increasing as customers choose healthier lives.

Tables 2 and 3 demonstrate that the adult soft drink market grew overall between 1999 and 2001,
with all categories losing market share and sales to the clear carbonates sector, which rose by
264 percent in volume and 236 percent in value.

Between 2001 and 2006, the market is expected to expand by 20% in real terms, reaching a
market value of £822 million in 2006, with volume sales expected to climb by 29%.
Analysis can shed light on how your business is performing and assist you in making course
corrections if your plan is falling short of the mark. A situational analysis consists of the
following components:

The business

An examination of a company's vision, strategy, and objectives—and if they are being met—is
an excellent place to start. Examining the company's performance through the lens of sales,
market share, and customer retention provides a useful snapshot of whether the business is
meeting its objectives. Additionally, it can assist you in evaluating rivals and market share.

Commodities and services

Analyzing existing products or services, as well as anticipated new releases, is a critical

component of a scenario analysis. Market research is required to ascertain the viability of a new
product or service.

A market analysis done with potential consumers who provide comments or thoughts about the
product, service, or price can give insight on who the target market is and how a company's
products might be improved. Separately examine products and services to determine which ones
best satisfy your clients' demands and which ones require adjustment.

Distribution

Market study identifies a company's target demography and the level of demand for its products
or services. The competition analysis evaluates your firm in comparison to comparable
businesses. Both can provide valuable insight on your company's distribution routes.

The distribution section of a scenario analysis examines how your products are distributed and
compares it to that of your rivals in order to discover the most effective distribution methods for
your firm.
Opportunities

Market possibilities exist when unmet or underserved demands exist. Understanding how to get
that market share is critical to a business's success. However, before a corporation can effectively
target an untapped market, it must first analyse its own strengths and flaws. A strength,
weakness, opportunity, and threat (SWOT) analysis is an effective method for determining your
business's capacity to capitalise on opportunities.

A SWOT analysis is a reasonably straightforward process that often results in a collection of

data.

Establish four categories: advantages, disadvantages, opportunities, and dangers.

Internally effective systems and processes, competitive advantages, and assets like as
technology, patents, knowledge, and cash should all be included in the strengths area.

Weaknesses are internal problems that limit your business's ability to compete more effectively,
such as recruiting shortages or a lack of money.

External variables such as regulatory changes, future news, and unique events can all benefit
your business.

Threats are external elements over which your business has no control.

In each category box, provide the pertinent information. Brainstorming is a wonderful method
for capturing ideas and information. Keep track of the ideas generated during the brainstorming
sessions in the appropriate boxes and develop an overall insight for each area. Once completed,
compile and summarise all of the insights.

When doing a SWOT analysis, the strengths and weaknesses of your firm are determined
internally, while the opportunities and threats are determined outside.

The SBA Score division provides a free SWOT analysis template.

Analyses of customers

Conducting extensive research is crucial to comprehending your clients. Collect demographic

information on your customers, their locations, their interests, and their issues. Once you have a
firm understanding of your customers, you can identify additional potential customers as your
target market and develop an effective marketing strategy. Knowing your clients enables you to
ascertain the requirements, tastes, and behaviours of your target market in order to develop the
most effective strategy for reaching them.

Competitors

Analyzing your primary rivals will assist you in determining how your firm stacks up.
Identifying and evaluating a company's competitive advantages might assist your organisation in
adapting to compete more successfully.

Conducting competitive research on their products or services, sales, and marketing methods
might assist you in adjusting your company's strategy to gain an advantage. Your competition
study should include information about a rival's market share, as well as its strengths and flaws.
The SBA maintains a database of business statistics that you may use into your analysis.

Collaborators

Collaborations and partnerships are key components of many corporate processes. They include
raw material suppliers, business partners, and distributors who may handle your organization's
supply chain, production, and vendor connections.

Analyze collaborations to determine their strength and viability. Examining contracts and
determining if items and services have been supplied as promised in the past can provide insight
into a company's relationship's dependability.

Current business climate

A situational analysis should consider both the external and internal factors affecting a business's
success. External variables such as the economy, rivals, government laws, and regulations all
contribute to external factors. Internal elements affecting a firm include its culture, its people, its
resources, and its financial management.
A PESTLE study analyses a company's external environment by examining aspects such as
political, economic, social, technical, legal, and environmental. Examining each category might
reveal information about the broader business market. Examine each category of a PESTLE
analysis in further detail:

Factors political: the effect of government actions or elections

Economic factors: the impact of fiscal trends, present import-export ratios, and taxes on a
corporation.

Social determinants: the impact of consumer habits and demography

Technological variables: the influence of technology and innovation on a business

Legal considerations: the effect of safety standards and labour legislation

Environmental factors: the impact that environmental restrictions and climate change have on a
business

Example of a 5C scenario analysis

A situational analysis should take into account both internal and external elements affecting a
firm, and a 5C method may be the most straightforward. The five Cs are the firm, the customer,
the competition, the collaborator, and the climate.

The company component of a 5C analysis consists of the firm's vision and goals, as well as its
market position, distribution, opportunities, and goods. Consumers supply critical information
about present customers, the target market, and the prospects that a business might pursue as part
of its marketing strategy.

The rivals' section identifies a company's strengths and areas for improvement based on the
strengths and weaknesses of competitors. Collaborators are the relationships that enable the
creation and dissemination of products. Climate factors in aspects such as government policy and
the economy, as well as election projections for 2020.
Conducting periodic situational analyses can assist you in determining the status of your business
as it changes in order to ensure market success.

A scenario analysis serves a variety of functions.

An analysis may shed light on your business's position in the present market, on what is working
and what might be improved, as well as on chances to capitalise on and develop.

Utilize a scenario analysis to create a marketing strategy, uncover market gaps your business can
fill, promote new technologies, and adapt to rival developments. Adapt the report as necessary to
have a deeper understanding of your business's origins—and the path it should go.

1.2.9 Other methods of Market situation analysis

In marketing, what is a scenario analysis?

A scenario analysis is a collection of tools used by marketing managers to examine a company's

internal and external environments in order to get a better understanding of the organization's
capabilities, customers, and business [Link] marketing plan is vital, and situational
analysis plays a crucial role in it. Analyzing the marketing environment is the first stage in
developing a new strategy and marketing plan. This analysis will also incorporate a SWOT
analysis.

Additionally, situation analysis is undertaken on a regular basis following the implementation of

a plan to assess if any strategy revisions are necessary. Market definition and analysis, market
segmentation, and competition analysis are all included in the scenario evaluation.

I'll discuss how to create a situational analysis, the many sorts of situational analyses, and how to
construct a situational [Link] situational analysis will become a component of your
marketing plan, since it will apply to many marketing circumstances. Your marketing benchmark
is the scenario analysis for the marketing plan.
The company's selection of individuals (or organisations) to target is based on the results of the
scenario analysis. The target market selection choice reveals the degree to which the marketing
program's positioning plan must be met.

Positioning is a marketing management term that refers to the combination of a product, a

distribution channel, a price, and a promotion plan. It is intended to differentiate the business
from its primary rivals while also addressing the demands of the target market. New product
strategies are critical to maintaining a steady supply of new goods to replace mature items that
are phased out. The strategy selection process takes into account the situational and competitive
aspects existing in the chosen product market.

Definition and Analysis of the Market

Correct market definitions are necessary for analysing buyers and competitors and forecasting
future [Link] situational analysis should begin with market research. Strategic analysis and
planning are ineffective when referring to the market in broad strokes. For instance, the Colorado
market, the European market, or any other geographic area with a varied population of
individuals and businesses. A more precise definition of needs and desires is required. For a
market to exist, there must be individuals with specific needs and desires for one or more items
that can meet those needs and desires.

Additionally, market participants must be willing and able to pay for a product that meets their
requirements and desires. Thus, the idea of product-market simplifies the defining process. A
product market is defined as a single product (or series of related goods) that satisfies your
unique set of requirements and desires for all individuals or organisations willing and able to
acquire the product or service. The term "product" can apply to a tangible good or an intangible
service. This concept assigns a product category to individuals or organisations that have a
common set of requirements and [Link], depending on the particular or broad nature
of the requirements, the corresponding product category will be similarly specialised or broad.
Analyzing product markets and projecting future trends are critical components of business and
marketing strategy.
Strategic marketing decisions about entering new product markets, how to service current
product markets, and how to exit unappealing product markets are crucial. Marketing
professionals possess the necessary skills, expertise, and methodologies to (1) perform product
marketing analysis, (2) understand the strategic implications of the findings, and (3) develop
product market strategies. Market analysis entails the following activities:Identifying and
defining new product markets that present an opportunity for a business. Conducting an analysis
of current product marketplaces in order to establish strategic goals. Environmental scanning and
predicting of future trends and new product markets. Demand and supply analysis is a critical
component of product marketing analysis. Demand reflects the purchasing power of the
individuals and organisations who compose the market. Supply refers to the extent to which the
corporation supplying the market can meet the available demand. You may think this is
elementary economics, but you'd be amazed how many people overlook this. A thorough
examination of the buyer's demands and requirements is also an integral aspect of the product
marketing analysis process. These customer analysis activities assist marketers in determining
which consumers to approach and how to best satisfy their demands. Your situational analysis
reveals details you may have overlooked previously. As the leader of Soricon's check reader
product in Boulder, CO, I assisted in identifying a significant gap in the single and multi-lane
retail sectors. Retail managers, banks, and clearinghouses desired to curtail and eventually
eradicate check fraud. And thus was created the check reader. The check reader enabled the POS
attendant to scan the check, transferring MICR data back to the bank to confirm adequate funds
were available before completing the sale. This prevented retail businesses from losing millions
of dollars in fraudulent purchases. Segmentation of the Market Market segmentation finds
groups of customers with comparable wants within a product market. Segmentation enables a
company to better match its strengths to the needs of one or more buyer [Link] situational
analysis reveals new information about market segments. This may involve a strategy based on
accounts. The primary concept of segmentation is to explore distinctions and needs.
Additionally, to identify two or more categories within the target product market. Each target
market consists of customers who have comparable demands and desires for the product
category in which marketers and senior management are interested. Typically, the segments
differ in terms of the buyer's attributes, the reasons they purchase or use specific items, and their
preferences for specific brands of products. Similarly, segments of industrial product markets can
be defined by the kind of industry, the product's intended purpose, the frequency with which the
product is purchased, and a variety of other variables. A segment's features may differ
significantly from the average characteristics of the total product market. The similarity of
people's requirements within a market segment enables a marketing programme to be more
effectively targeted. Age, income, and lifestyle all influence how people shop for food, financial
services, autos, and other consumer goods. Analyze Your Competition and Your Situation
Analyzing rival tactics, strengths, weaknesses, and goals is a critical component of scenario
analysis. It is critical to identify both current and prospective rivals. Typically, a subset of the
industry's firms constitute the strategic group of a company's primary competitors. The analysis
should highlight the analysis's most significant strengths and limitations. Often, the enterprises
that comprise an industry exhibit great variety. This is demonstrated in Exhibit 1 by the
competing enterprises in the computer service industry in the United States.

The companies exhibit significant variances in terms of their level of connection with clients and
the degree to which their services are customised. Each quadrant of the map depicts businesses
that have common qualities.

1.2.10 Design of Market situation analysis

Market Segmentation and Positioning

Marketing advantage is impacted by contextual elements such as industry characteristics, firm

type, degree of difference, and buyer wants, as well as the company's unique competitive
advantages. The critical problem is determining how to compete in light of the circumstances
around a business. For instance, the marketing strategy of a market leader in a developing sector
is very different from that of a small business operating in a mature industry.

Positioning is determined by the following factors:

The factors or rewards that a buyer considers while making a purchase, as well as their relative
importance.

The degree to which and the manner in which a business is distinct from its competitors.

The constraints of competing items in terms of critical customer needs and desires.

The positioning statement serves as a springboard for developing a strategy. Positioning reflects
how the organisation wishes to be viewed by the target market and its consumers. Positioning is
defined in terms of a reference point, most frequently competition.
The formulation of a plan should begin with a product strategy and then go on to distribution,
pricing, and promotion strategies. Notably, the strategy components form a symbiotic network of
acts that complement and reinforce one another.

The selection of an effective marketing programme plan is hampered by the vast array of
possibilities available to management. Nonetheless, there is frequently a clear logic to how the
components of a marketing campaign should fit together in a specific context.

Product, distribution channel, pricing, advertising, and personal selling decisions must all
contribute to the development of an unified marketing campaign aimed at addressing the
requirements and desires of customers in the company's target market.

Creating a digital marketing campaign integrates the company's marketing skills into a bundle of
activities aimed at positioning the business against its competitors in order to compete for the
clients that comprise its target market.

Marketing management must determine the function and scope of each marketing programme
activity.

These decisions establish the overall amount to be spent on the marketing programme throughout
the planning period, as well as the allocation of resources among the different programme
activities, such as content marketing, SEO, advertising, and direct selling.

Market Strategy and Analyses of Your Situation

The target market strategy identifies the individuals (or organisations) inside the product market
that management desires to serve.
When buyer requirements and desires differ, the market target is frequently a sector of the
product market. Marketing managers must determine whether to target many segments. After
identifying a company's product markets and assessing their relative value to the business,
management must decide on a targeting strategy.

The marketing strategy's focus point is the market segmentation decision; segmentation serves as
the foundation for defining objectives and constructing a positioning strategy. The target market
approach alternatives include focusing on all or the majority of the categories. The choice to
target is based on a revenue cost analysis and an evaluation of the competitive landscape.

The following information is required for each market target:

The target market's size and growth rate.

Users in the target group are described.

The profile or persona of the consumer.

End-user information will aid in the selection of a positioning strategy.

Short-term marketing strategy guidelines.

Positioning Strategy for Marketing Programs

The positioning strategy of a marketing programme is comprised of the product, the channel of
distribution, the price, and promotion strategies. These are chosen by management to strengthen
the company's position against important rivals while also addressing the demands and desires of
the target market. Your situational analysis should assist you in matching your messaging to your
ideal consumer profile. This technique is sometimes referred to as the marketing mix or
marketing programme. This positioning strategy establishes a unifying notion for the function
and strategy of each component of the marketing mix. The positioning statement expresses the
marketing management's desired perception of the company's marketing mix by the target
market. The first stage in designing a positioning strategy is determining what objectives each
target market should have. Marketing objectives are developed at several levels within the
organisation. Corporate objectives define the company's overall performance goals (e.g., growth,
profit, employee development, and other broad objectives).

Each target market has its own set of objectives. Objectives are arranged in a hierarchy, ranging
from extremely broad corporate goals to the precise goals of a sales representative. I've provided
several marketing objective examples.

Choosing a Marketing Strategy

The marketing strategy chosen is influenced by the business's status and competitive
environment. Selecting a strategy is facilitated by determining the sort of plan that is appropriate
for the scenario in which a given business finds itself. For instance, a business creating a plan for
entering a new market might benefit from an examination of the strategic concerns and criteria
for new market entrance. Other instances include product lifecycle strategies, fragmented market
strategies, global strategies, and enterprise company strategies. Analyzing distinct strategic
scenarios enables the development of strategic design procedures that place a premium on the
critical strategic variables confronting a business. By evaluating the many elements impacting
strategy selection and developing action recommendations for viable strategies, management
develops strategy selection abilities. Significant strategy selection criteria (for example,
implementation difficulty) can be evaluated to aid in the strategy selection process.

1.3 ANALYSIS OF COMPETITOR STRATEGIES

Overview

In today's highly competitive market, it is no longer sufficient for a business to understand its
consumers. Businesses must keep a careful eye on their rivals. They must regularly benchmark
their goods, pricing, distribution methods, and promotional activities against those of their direct
competitors in order to find areas of competitive advantage and disadvantage.
Firms must be proactive and identify both present and future rivals, collect information, and
maintain a market intelligence system to track competitor activity and market trends. Often
referred to as "Competitor Myopia," ignoring or underestimating the threat posed by future rivals
in favour of current competitors. Theodore Levitt invented this word to describe circumstances in
which corporations fail to understand the full breadth of their operations. Competitor Myopia has
the potential to force businesses out of business!

Firms must do constant competitor analysis in order to develop successful competitive strategies.

2. Defined Competitor Analysis

Competitor analysis offers a strategic context for recognising possibilities and risks on both an
offensive and defensive level. The offensive strategy framework enables organisations to
capitalise on opportunities and leverage strengths more rapidly. On the other hand, the defensive
strategy framework enables them to respond more effectively to the danger posed by competing
enterprises looking to exploit the firm's own shortcomings.

Firms do competitor analysis to determine who their important rivals are, create profiles for each
of them, ascertain their aims and tactics, evaluate their strengths and weaknesses, estimate the
danger they offer, and forecast their response to competitive actions. Businesses that establish a
systematic and sophisticated approach to competitor profiling gain a major competitive edge.

3. Recognize Existing and Prospective Competitors

Firms must employ both an industry and a market strategy when identifying their existing and
prospective rivals. The industry approach will provide insight into the industry's structure and
product offerings from all market participants. On the other side, the market strategy focuses on
the consumer demand and the businesses that are striving to meet those requirements, providing
the firm with a broader picture of existing and future rivals.

Potential competitors include (but are not limited to) firms that compete in a related product
category, use related technologies, already target the same market with unrelated products,
operate in other geographic regions with similar products, and, finally, new start-ups organised
by former company employees and/or managers of existing firms. Firms that have a common
target market and strategy form a strategic group and are the closest competitors of firms seeking
to join that group.

Analysis of the Industry

An "industry" is described as a collection of businesses whose products and services are highly
interchangeable. Industries are categorised mostly on the basis of the number of vendors and the
degree of product differentiation. Additionally, the following elements contribute to the structure
of an industry: entry/exit barriers, cost structure, degree of vertical integration, and level of
globalisation. Industries are frequently categorised as monopolies, oligopolies, differentiated
oligopolies, monopolistic competition, or pure competition based on the number of sellers and
product difference.

Each category is detailed in further detail below.

Monopoly occurs when a single corporation delivers a certain product/service in a particular

country or region. The distribution of electrical electricity to residential and business clients is a
frequent example. Given the absence of alternatives for clients, an unfettered monopoly striving
to maximise profits has a proven motive to charge a higher price, conduct little or no promotion,
and provide rudimentary service. On the other hand, a controlled monopoly is compelled to
charge lower rates and provide additional services in the public interest. Monopolists may be
prepared to invest in service and technology if partial alternatives for their products or services
are available or if impending competition is near. Electric power generation and distribution are
excellent examples of this behaviour, particularly in light of recent discoveries in alternative
energy sources and technical advancements in the utilisation of electric power.

In the gasoline sector, oligopoly is defined by a small number of enterprises manufacturing

essentially the same product, such as Mobil, Shell, and Sunoco. Any single firm will struggle to
sell gasoline goods over the market rate unless it can distinguish its product range in some way.

Distinct oligopoly refers to an industry in which a few businesses make goods that are only
somewhat differentiated, such as Sony, Canon, and Nikon in the digital camera sector.

Differentiation is accomplished by the use of distinct product characteristics such as quality,

unique features, style, or services. Typically, rivals will want to be the market leader for a certain
feature, therefore attracting clients who value that attribute and charging a premium for it.

Monopolistic competition exists when many competing enterprises in a sector are able to
distinguish their offerings entirely or partially. This is the case with grocery chains such as
Wegmans, Tops, and Price Chopper in Upstate New York. In this context, companies often
target market sectors where they can provide a superior level of service to the consumer and
hence fetch a higher price. Pure competition occurs in industries when a large number of
enterprises offer the same product/service. Because there is no distinction between offers, prices
are fixed for all enterprises, as is the case with the majority of agricultural commodities (e.g.
wheat, cabbage, and onions). There is no value to advertising, and the seller's earnings will be
affected solely to the degree that they can reduce manufacturing or distribution expenses.
Analysis of the Market

From a market viewpoint, rather of focusing just on firms who make the same product, a firm
searches for rivals among those that meet the same consumer demand. To prevent slipping into
Marketing Myopia, and to encompass all present and future rivals, this requirement must be
stated widely.

For instance, in the coffee market, a corporation like Nestle needs evaluate direct competitors
such as Maxwell House and Taster's Choice, as well as indirect competitors. This includes any
firm that sells coffee machines in direct competition with Nespresso, such as Keurig and Mister
Coffee.

Current and future rivals are many. Companies may experience brand rivalry, industry
competition, form competition, or generic competition depending on the degree of product
replacement.

• Brand Competition: the firm evaluates other businesses that offer a comparable product/service
to the same clients at comparable rates. Coca Cola, for instance, would view Pepsi Cola as its
primary competition.

• Industry Competition: the business takes a broader view and considers all enterprises that
manufacture the same product or class of products to be rivals. Coca Cola, for instance, would
see all other soda makers as rivals.

• Product Competition: the firm takes a broader view and views rivals as businesses that
manufacture items that provide the same service. For instance, Coca Cola would see all other
makers of carbonated beverages as rivals.

• Generic Competition: the corporation might take an even broader view of its competitors,
viewing them as firms competing for the same consumer money. Coca Cola, for example, would
view all other beverage manufacturers as rivals.

A)Competitive Strategy Development

Firms can be categorised into four types of positions in an industry: market leader, market
challenger, market follower, or market nicher. By defining its own role and that of its
competitors, a business may get further insights into them and develop more successful
competitive tactics.

1. Market Dominant
It is normal in many sectors for one business to have a disproportionately large market share.
This company leads the market in terms of pricing, new product releases, distribution reach, and
promotional spending. Typically, competitors oppose, mimic, or avoid the leader. Procter &
Gamble, Coca Cola, and McDonald's are all examples of market leaders.

Leaders seek to maintain their position as the market leader in their sector. Their general strategy
is to seek to increase overall market share, defend existing market share, or grow market share.

[Link] expansion

Market leaders often benefit the most from market expansion. The primary techniques utilised to
increase the market include acquiring new users, discovering new applications for their product,
and/or persuading existing consumers to use their product more frequently.

• To attract new users, a business might target consumers who are unfamiliar with the product or
are hesitant to purchase it due to its price or absence of key features. Johnson & Johnson
expanded the market for its infant shampoo by advertising to other family members.

• To discover new applications, a business may leverage its research and development resources,
new technology, or input from consumers who use the product in novel ways. For instance,
DuPont's nylon was initially used in parachutes, then as a fibre in the manufacture of women's
stockings, subsequently as a major component of garments, and most recently in the manufacture
of tyres and other automotive components.

• To encourage current consumers to purchase more of a product, a business creates ways to

persuade them to purchase the product on additional occasions and in higher quantities each
time.

For instance, Procter & Gamble says in its Head & Shoulders shampoo advertisements that the
shampoo is more effective when applied twice every shampoo occasion.

[Link] Market Share The greatest method for a leader to defend its market share is to
consistently improve its goods, customer service, distribution system, and cost structure (e.g.
Coke vs. Pepsi, Gillete vs. Bic, McDonalds vs. Burger King, General Motors vs. Ford)   

[Link] Share Expansion

In many circumstances, a single market share point is worth hundreds of thousands of dollars,
which means that leaders may greatly boost their profitability by growing their market share.
However, the impact of increased market share on profitability is strategy-dependent, since the
additional cost of acquiring the greater market share may surpass the additional income.
Additionally, some market leaders must exercise caution in order to avoid inciting antitrust
charges, investing more money than their increased market share is worth, or adopting the
incorrect marketing methods.

To plan productive competitive marketing strategies, the company needs to find out about its
competitors. It must compare its products, prices, channels, and promotions against those of
close competitors on a regular basis. The company will be able to identify areas of possible
competitive advantage and disadvantage in this manner. It will be able to launch more effective
marketing campaigns against competitors and will be able to create stronger defenses against
their actions.

"Who are our true competitors?"

Is a tour operator in direct competition with a male outfitter? Is a business school in direct
competition with an insurance firm? Perhaps the answer is yes, if all of them are competing for a
piece of the consumer's wallet.

Who are the competitors?

1. Who do we generally compete with?
2. Who are our most ferocious rivals?
3. Who is the manufacturer of the alternative goods?
4. Who might be interested in competing?
5. Is there anything that can be done to deter them?

Taking a Look at the Competitors?

1. What are their goals and plans for the future?
2. What are the impediments to admission and exit?
3. What is their pricing strategy?
4. Do they offer a cost benefit or a cost disadvantage?
5. What are their advantages and disadvantages?
6. What are their strengths and abilities?
1.3.1 Understanding the Competitors

To have a better knowledge of your competition, look at them from many perspectives, such as
their size, growth, and profitability, their image and positioning plan, and their level of
commitment. By evaluating data relating to main consumer motivation, significant cost
components, mobility constraints, and value chain, it is useful to consider the characteristics of
successful and unsuccessful firms. Market research and a range of other sources, such as trade
journals, trade sources, consumers, and suppliers, can provide information about competitors.

Fig: 1.3.1 Steps in Analyzing Competitors

1.3.2 Importance of analyzing competitor strategies:

It is necessary to take routine competitor analyses throughout the lifecycle of your business to
stay updated with market trends and product offerings. A competitor analysis can reveal relevant
information about market saturation, business opportunities and industry best practices. It's also
crucial to understand how your customers see you in relation to your competitors. A competition
study can help you understand what services are currently accessible to your target client and
which are being overlooked. Both offence and defense benefit from competitor analysis. When
you compare your company to its competitors, you can see where you can improve as well as
where you thrive. It may even assist you in identifying a new niche in which you may capitalize.
1.3.3 There are three different kinds of competitors:
 Direct competitors include: A direct rival provides the same products and services to
the same target market and customer base, with the same profit and market share growth
objectives. This suggests that your direct competitors are aiming for the same audience as
you, selling similar products, and using a similar distribution model."
 Indirect competitors: "An indirect competitor is a corporation that provides similar
products and services to direct competitors, but with distinct ultimate goals."
  Substitute competitors: "Another company that provides your customers with a product
or service that you also give. It's essential to understand how you stand out once you've
decided on the type of competition you want to be compared against. 

Fig: 1.3.2 Competitor Analysis

1.3.4 Elements of Competitors analysis:

Every competitor analysis should include the following ten elements:

 Feature matrix: Find all the features that each direct competitor's product or service
possesses in a feature matrix. Keep this in a competitive intelligence spreadsheet to
visualize how companies compare up against one another.
 Market share percentage: It can help you figure out who your key market competitors
are. Don't exclude larger competitors totally, as they have much to teach about how to
win in your field. Instead, use the 80/20 rule: target 80 percent direct competitors
(businesses with similar market shares) and 20% top competitors.
 Pricing: Calculate how much your competitors are charging and where they lie on the
quantity vs. quality scale.
 Marketing: What kind of marketing approach is used by each of your competitors?
Examine your competitors' websites, social media presence, event sponsorships, SEO
techniques, taglines, and current marketing initiatives.
 Differentiators: What sets you apart from your competitors, and what do they tout as
their greatest qualities?
  Strengths: Figure out what your competitors do well and what works for them. Do the
reviews suggest they have a better product? Do they have a lot of people aware of their
brand?
 Weaknesses: Determine what each rival could improve on. Do they have a social media
plan that isn't working? Is it true that they don't have an online store? Is their site up to
date? This knowledge can help you get a competitive advantage.
 Geography: Examine your competitors' locations as well as the territories they serve. Is
this a brick-and-mortar company, or does the majority of their business take place online?
 Culture: Examine the objectives, employee happiness, and corporate culture of your
competition. Are they the type of company that proclaims its founding year, or are they
modern start-ups? Read employee reviews to learn more about the company's culture.
 Customer reviews: Examine the customer reviews of your competition, noting both the
positive and negative aspects. Look for 5-star, 3-star, and 1-star reviews in a 5-star
system. Three-star evaluations are frequently the most truthful.

1.4 ESTIMATING COMPETITOR’S REACTION PATTERN AND

COMPETITIVE POSITION.

Any executive will tell you that understanding how rivals will react to your activities is crucial
when making strategic decisions. However, if you ask that same individual how seriously her
firm takes rival reaction, she is likely to roll her eyes. According to a recent McKinsey &
Company poll, two-thirds of strategic planners strongly believe that organisations should factor
anticipated rival reactions into strategic choices. Yet, according to a poll performed by David B.
Montgomery, Marian Chapman Moore, and Joel E. Urbany (published in 2005 in Marketing
Science), less than one in ten managers recalled doing so in the past and less than one in five
anticipated to do so in the future.

This divergence occurs because game theory, the sole formal framework for analysing rivals'
conduct, frequently becomes unmanageable in practise. To begin, most game theory models
presuppose that all participants adhere to fundamental game theory principles—a presumption
that is plainly wrong. Additionally, game theory models become complex when a competitor has
a large number of alternatives, when the strategy is uncertain about the metrics his adversary will
use to assess them, or when there are numerous adversaries, each of whom may behave
differently. However, when strategists rely on ad hoc predictions or war-gaming exercises, the
analysis can devolve into near-complete arbitrariness. The amount of qualitative factors that
enter the prediction process—personal biases and hidden agendas, for example—risks
undermining the conclusions and increasing the likelihood that top management would reject
counterintuitive findings.

Our Investigations

The conclusions in this paper are based on our expertise assisting customers with competitive
forecasting...

Over the last few years, as the leader of McKinsey's efforts to model competitive behaviour,
we've worked with a variety of organisations to forecast the potential reactions to their strategic
initiatives. Through that study, as well as a 2008 poll of top executives, we built a practical
technique to anticipating competitive behaviour that adheres to the theoretical rigour and
precision of game theory while being as easy to deploy as the majority of other methods. (For
additional information on the survey we utilised, see the sidebar "Our Research.") Our technique
entails condensing all conceivable evaluations of a rival's reaction to a certain strategic move into
a sequential examination of three issues:

Is the rival likely to respond at all?

What alternatives will the competitor examine actively?

Which option is most likely to be chosen by the competitor?

Two facts enable this streamlined method. To begin, if your adversary employs primitive
analytical procedures—as our survey indicates is the case for the majority of businesses—you
may utilise such approaches to forecast his response. Second, our research discovered that the
majority of large corporations follow a predictable pattern when reacting to a competitor's move.

The payoffs associated with adopting the method we recommend can be substantial—especially
when contrasted to the expense of generating no forecasts at all. We assisted the major
participant in a transaction-processing business in seeing that reorienting its strategy in a new
direction would almost certainly elicit a positive, rather than destructive, response from its main
competitor. The firm adopted the approach, the competition reacted as expected, and the
outcome was a complete reversal of the industry's fortunes. We also stood by while a telecom
business failed to comprehend its competitors and hence overpaid for a new telecom license—a
mistake that cost the company $1 billion and contributed to its bankruptcy within a few years.

In this post, we will investigate each of the three questions above and expose several
conventions, biases, and patterns that businesses use while analysing their competitors. Please
keep in mind that the data presented in this article represent averages across sectors, regions,
firm sizes, and competitive environments—all of which can have a substantial impact on these
trends. (In genuine client scenarios, we apply client-specific inclinations.) If you have particular
knowledge on how your market segment has behaved or, even better, how an enemy makes
decisions in general, you should use it in place of our averages. However, as you will see,
understanding the tendencies of all companies simplifies the process without sacrificing accuracy
unnecessarily.

Is There Any Reaction from the Competitor?

Even businesses that do competitive analysis frequently overlook the possibility that a rival
would opt not to respond to a strategic move. By excluding that alternative, the strategist reduces
the expected value of his company's move: the greater the perceived chance of competition
counteraction, the smaller the expected return. Additionally, with a lower expected return on
investment, the company is less likely to take bold action.

Is the Competitor Going to React?

The first step in analysing a competitor's response is to consider the possibility of no response.
To ascertain this, you must...

Why are otherwise conscientious strategists omitting this step? To begin, all managers—
including, somewhat ironically, those who avoid competitive analysis entirely—are schooled in
stories about companies that failed because they ignored their competitors, and they are fearful
that by assuming no reaction, they will become a protagonist in one of those narratives. They
fear that if they consciously forecast no reaction and the competition does, they will appear even
worse. They err on the side of presuming a response to avoid undesirable eventualities. Second,
personnel must portray the rival in firms that conduct war-gaming exercises. These individuals
frequently believe they would appear more intelligent and involved if they forecast a clever
move or countermove by the competition rather than just reporting to the group, "We've
considered it, and we don't believe we should do anything." Consider how a day-long session on
wargaming would begin in this manner. The organisers are likely to disregard the original
conclusion and continue the move-countermove practise.

Thus, the first step in studying competitor reaction is to consider the possibility of no reaction.
This may be determined by asking four subquestions. If you respond no to any of these, your
odds of receiving a response are slim.

1. Is your adversary aware of your actions?

Even if an action seems self-evident to you, your adversary may miss it for one of two reasons.
To begin, the majority of businesses rely on imprecise data to gauge market trends. For instance,
in China, the majority of significant consumer goods businesses collect data on rival volumes in
only 30 main cities that account for around half of the market. As a result, they are unable to
identify new items aimed for smaller cities. In the United States, a large consumer products firm
recently missed substantial market share gains by a rival because the market-tracking service it
(and other comparable companies) utilised did not include dollar shops, which accounted for
20% of the market for this type of commodity. Second, if your new product affects many
business units of your rival, it may not register as substantial to any one unit and hence be
disregarded. On average, just 23% of respondents in our poll knew about a competitor's
innovation in time to reply before it reached the market (while we questioned respondents about
product or service innovations generically, we will refer to these specific replies as "new
product"). Only 12% of respondents learnt about a competitor's pricing shift in time to formulate
a preemptive reaction. (In our research, we surveyed one group on their reactions to an
innovation and another regarding their reactions to pricing changes.) Additionally, you may
increase your chances of evading discovery by exploiting your opponents' blind spots, which will
become apparent as you analyse the next three subquestions.

Only 23% of the CEOs we polled were aware of a competitor's new service in time to reply
before it launched.

2. Will the competitor perceive you as a threat?

Even if your rival observes your activities, he may not see a threat—and hence may not believe
that mounting a reaction is worth the effort and disruption. The majority of corporations evaluate
performance purely in relation to their yearly budgets. If the budget's financial objectives can
still be accomplished despite your planned action, management will perceive the firm as "on
track" and secure. Thus, assessing whether your enemy would answer is critical to predicting if
he will respond, and is frequently easier to determine than you might imagine. Certain businesses
disclose their objectives by product line. Numerous businesses publish earnings objectives. For
public corporations that do not publish their objectives publicly, the earnings forecasts of
securities analysts—which many companies use as targets—can be substituted. If no such data is
available, just calculate the prior year's volume growth rate and presume the firm would aim for
a comparable pace this year. Once you've established your competitor's anticipated objectives,
you may evaluate industry sales statistics to see whether the firm is on track. When you factor in
the likely consequences of your activity, you may make an early estimate regarding the
company's future viability.

3. Is mounting a reaction going to be a top priority?

Before you make a move, your enemy already has a comprehensive agenda. It includes product
launches, marketing campaigns, reorganisations, large acquisitions, plant openings, and cost-
cutting initiatives—all of which must be scaled down in order to respond to your relocation. As a
result, if your adversary has already committed to plans that will consume all of his attention, he
will be averse to shifting priorities. By determining the perceived "cost" to your opponent of
abandoning his planned endeavours, you may determine if he will choose to ignore you.
Additionally, keep in mind that some of the business unit's goals will have been determined by
its corporate parent. For instance, assume the parent company of a unit faces earnings pressure
from Wall Street. If the unit's instructions are to create present revenue, its management may
remain silent (or may pick an insufficient response) despite feeling fairly threatened—especially
if a forceful reply would be more costly in the short term than ignoring your conduct.

4. Is your adversary capable of overcoming organisational inertia?

Even if senior management desires to respond, the company as a whole may be resistant.
Numerous variables might exacerbate this obstacle. To begin, if responding involves significant
organisational changes, it is highly unlikely that the corporation will do so until the threat is
immediate and lethal. We once advised a telecom customer that, within three years, it will
confront competition from new entrants. To prepare, the customer required a new planning
methodology, the development and implementation of which would take the whole three years.
Because the threat had little effect on present performance — despite management's
acknowledgement — the corporation lacked the drive to make more than minor adjustments. As
a result, it ultimately lost almost 30% of its market share.
Second, managers are often hesitant to forsake their success formula, and when they do, they are
notoriously inept at changing it. Employees adhere to thousands of processes designed to bolster
the formula. These are tenacious.

Third, businesses often struggle to construct a response that entails the participation of third
parties who may not share their urgency. In the late 1980s, a small pizza delivery chain in the
United States called Papa John's noticed a shift in consumers' perceptions of the quality of Pizza
Hut and Domino's (the top two chains) and capitalised on the opportunity by developing a
differentiated value proposition dubbed "Better ingredients. Better pizza." Throughout the 1990s,
Papa John's developed swiftly and surpassed the two larger competitors to become the third
biggest pizza company in the US. Incapable of mobilising their franchisees around quality until
the danger became clear, the large chains waited until 2000 to respond with their own improved
pizzas.

Even if they were aware of a competitor's strategic action, 17% of our survey respondents
indicated that they did not respond to it.

While all rivals will notice a significant shift, our experience indicates that organisations
overestimate the chance of a medium to minor action being observed by 20% to 30%.
Additionally, 17% of our survey respondents indicated that they made no reaction even though
they were aware. This is surprising, given that respondents were recalling just those instances in
which their organisation identified a danger and rated the action as a "major" move with the
"potential to considerably influence your assessment of your competitive position in your market
category." Thus, the chance of receiving no answer in an average real-world circumstance may
be significantly greater. Taking all of these considerations into account, it is plausible to expect
that businesses do not respond to their competitors' activities at least one-third of the time—
certainly enough to merit an explicit effort on your part to ascertain if your competitor will.
Additionally, merely determining if a competition would reply simplifies the entire process. If
you believe the firm will not react, you can proceed directly to the next stage.

What Alternatives Will the Competitor Consider Actively?

According to classical game theory, the next stage would be to provide a comprehensive list of
all possible possibilities for your competition to examine, assuming it would research each one
before picking one. However, this very assumption undermines businesses' confidence in their
capacity to forecast, leading them to forego analysis. In comparison, our experience with
customers and the survey findings reveal that, while rivals may discuss a variety of answer
choices, they genuinely consider only a few. Daily duties that keep some rivals from replying at
all may also hinder them from dedicating time to thoroughly analyse all alternatives.

When we analysed the number of choices considered by businesses seeking replies to a

competitor's new product launch or price adjustment, we discovered that the vast majority
explore less than four. The median number of actively explored choices was nearly identical to
two or three. The distribution was likewise tight: about 75% of respondents examined two or
three; 10% or less examined five or more. Due to the fact that you cannot predict which
possibilities your adversary will evaluate, you must analyse more thoroughly than he does.
Having said that, the number can be limited, since you can anticipate which possibilities he will
evaluate. Both the innovation and pricing groups in our study identified "the single most
apparent counteraction" as the most often examined alternative (in these situations, that would be
introducing a me-too product or matching a price change). In all situations, almost 55% of
participants said that they considered the most obvious response, and more than one-third of
those who evaluated only one response chose that choice. As a result, there is a significant
possibility that a rival is evaluating the most apparent reaction carefully.

However, there were notable distinctions between the various possibilities evaluated in the
context of a new product and those considered in the context of price. 43% of price managers
examined what their business unit did the last time it encountered a comparable circumstance,
compared to only 26% of innovation managers. 25% of innovation managers indicated that they
were likely to consider recent activities by other business divisions inside the organisation,
compared to 16% of price managers. In all categories, around 30% of managers sought guidance
from board members and external experts. The second-least probable choice (20 percent for both
groups) was to examine the business unit's past experiences, and the least likely option (19
percent for both groups) was to consider the executive in charge's prior experience. The basic
line is that you don't have to go back very far to determine which possibilities your competitors
will consider.
Which Option Is Most Likely to Be Chosen by the Competitor?

As a result of the preceding process, you should have compiled a brief list of potential
possibilities that your enemy is likely to explore. Now it's up to you to zero in on the one he'll
select. This prognosis creates the most worry for many strategists. It is not necessary. Bear in
mind that the alternative to making this prediction—avoiding predictions—is far worse, so the
effort does not have to be 100 percent right all of the time to be worthwhile.

Classical game theory (as most strategists are familiar with) takes a convoluted path to that
prediction: It states that a competitor will choose the option that maximises his net present value
after accounting for all sequential moves and countermoves made by all competitors (each of
whom typically has complete knowledge of the others' motives, economics, and options) until a
new equilibrium is reached. Regrettably, no portion of that prescription remains true in practise.

By combining the spirit of game theory with the real behaviour of businesses, strategists may
simplify and enhance prediction. Our experience teaches us to begin with the following rule:
Among the alternatives carefully considered by your enemy, he will select the most effective one
(as determined by his analytic approach) within the restrictions of his trade-off between short-
and long-term suffering. The rule makes logical and has been validated via our client work. To
put it into practise, strategists must consider the following two subquestions:

1. How far ahead does your rival appear to be?

In chess, the top players are said to anticipate five or more steps ahead—a process that
(intuitively) entails sorting through hundreds of thousands of "if he picks x, I will choose y, and
then he will choose z" possibilities. In business, planning ahead is a similar procedure. We
conducted actual trials in which the ideal option is different depending on whether the rounds are
even or odd. To make matters more complicated, your adversary's optimal answer may vary
depending on whether he analyses simply your reaction or that of other rivals as well.

Only 25% of our survey respondents explored more than two or three possible responses to a
competitor's move.

Fortunately, while there are several methods to examine a situation, the vast majority of
businesses, like you, prefer straightforward, readily replicated studies. When asked how many
moves and countermoves they studied, over 25% of our respondents said that they modelled no
interactions other than their own. This percentage was as high as 45 percent in other
circumstances (for example, financial sector responses to pricing changes). The next two most
often given responses were based on the assumption of a single round of counter-reaction by
either the first mover (the firm that introduced the innovation or price adjustment to which the
competition is responding) or many competitors. That is, around 35% used a one-stage response
model. (Again, the proportion was far greater in specific industries.) Fewer than 10% of the
managers questioned examined many rounds of response from multiple competitors.

2. How does the rival measure success?

Businesses frequently make the mistake of assuming that everyone assesses success the same
way. This explains why a large proportion of our clients feel their competition are "irrational."
However, would your most significant competition, who by definition has made a series of
intelligent choices (otherwise, he would not be your most significant competitor), pick this time
to lose his senses? Or is he merely following a plan that appears to be inept by your standards but
appears to be rather intelligent by his? Simply ask yourself, "What metric would have influenced
my competitor's recent decisions?" to ascertain your competitor's metrics. You won't have to
look far to get the solution. The majority of businesses employ easy, short-term strategies. Only
roughly 15% of respondents in our poll employed NPV to assess their alternatives. Seventeen
percent based their decisions on short-term market share, while another seventeen percent based
their decisions on short-term earnings. 20% considered "long-term" market share, while another
21% considered "long-term" earnings. However, do not interpret our responders' usage of the
term "long-term" literally. When asked how far into the future they anticipated the costs and
advantages of their probable replies, 85% indicated four years or less, and around 62% stated
two years or less. These percentages vary according on the respondent's geographic area and
industry. For instance, when considering price movements, the majority of respondents in Asia-
Pacific reduced their time horizon to one year, whereas financial services organisations increased
it to three to four years. Clearly, managers struggle to accept the uncertainty of short-term
expenditure in exchange for the certainty of long-term return.

Your final task is to mimic your adversary’s decision-making process by applying his metrics
and analytic techniques (including the rounds of competition) to the options you think he will
look at in order to see which one (or ones) seems best. Sensitivity analyses should be conducted
for the elements of greatest uncertainty to help determine whether or not the choice for your
adversary is clear-cut. If these indicate that the decision is a close call, then you must also assess
your adversary’s recent actions in response to a competitive move. Our research suggests that
even if companies consider multiple response options, most will have a clear preference for one
or two. The companies represented in our survey that reacted to a strategic move at all
(remember that 17% did not react) usually either made the most obvious response (22% in the
innovation group, 18% in the pricing group) or relied on the instincts of the decision maker (19%
of innovation managers, 13% of pricing managers). What you must do, therefore, is spend some
time understanding the patterns the CEO or relevant executives have displayed in prior
decisions: Get a gut feel for their gut feel. Talk to people who have worked with those executives
and learn about the units they have led. Look at the history of the competitor’s other units, as
well.

A rigorous analysis of competitors’ behavior doesn’t have to involve a lot of math and talk of
Nash equilibria. The key is to focus on understanding how a competitor actually behaves rather
than on the theory of how everyone should behave. By studying your competitor’s past behavior
and preferences, you can estimate the likelihood of his responding at all, identify the responses
he is likely to consider, and evaluate which will have the biggest payoff according to his criteria.
This information can give you an accurate idea of what your competitor is likely to do. And the
competitor you can predict is the one you can learn to outsmart. Isn’t that what strategy is all
about?

Knowing the tactics, aims, and strengths and weaknesses of competitors can assist managers
predict (project) how they will react to the company's strategies. Furthermore, each competition
has its own corporate philosophy, culture, and guiding values, all of which influence its reaction
pattern. Each competitor reacts in a unique way. Some companies might not react immediately or
aggressively to a competitor's move for a variety of reasons: they may believe their clients are
loyal; they may be sluggish to notice the shift; or they may lack the financial resources to
respond. Some competitors only react to particular types of assaults while others do not. They
may always react negatively to price reductions as a way of signaling that they will never
succeed. They may, however, be unresponsive to advertising increases, considering them to be
less dangerous. Other competitors retaliate quickly and strongly to every attack. Knowing how
significant competitors react might provide insight into the best ways to attack competitors or
protect the company's current positions.

1.4.1 Competitors based on reaction patterns

Competitors can be divided into four groups based on their reaction patterns:
  The Laid-back Competitor: This competitor does not respond swiftly or forcefully to
any of the opponent's movements or attacks. There could be a variety of reasons why the
laid-back competitors don't react right away, including the fact that they believe their
customers are loyal, that they are doing well in business, that they are slow to notice the
move, that they lack funds to react, that they are too preoccupied with their own
development plan, and that they are confident that rivals cannot harm their interests in
any way.
 The Selective Competitor: A competitor that respond only to certain types of attacks
and not to all attacks. For example, it may respond to price decrease, but not to increased
or improved promotional efforts.
 The Tiger Competitor: A competitor who reacts quickly and fiercely (like a tiger) to
any attack on its terrain or arena. The tiger competitor wants competitor to know that it is
a tiger and that they should avoid attacking since the defender (the tiger) will/can fight to
finish them.
 The Stochastic (Unpredictable) Competitor: A competitor who does not react in a
predictable manner. The stochastic competitor may not react for a variety of reasons. For
example, it may not want to react on a specific occasion; it may not be in a favorable
economic situation; it may want to prepare for a strong future attack; it may believe that it
is better to concentrate on improving its position rather than react; and/or it may believe
that rivals' attacks cannot harm its performance.

1.4.2 Competitors Competitive Position:

Competitive positioning is a marketing strategy that relates to how a company's marketing team
may set itself apart from its rivals. The company's position is determined by how its goods and
services compare to the value of similar goods and services on the market. Consumer judgments
are used in the competitive positioning method, usually on an aggregate basis.

There are four different sorts of competitive strategy:

1. A cost-cutting technique: It works well for huge companies that can create a large volume of
things at a low cost.
2. Cost-cutting strategy.
3. Differentiation leadership strategy.
4. A focus on differentiation strategy.

1.4.3 principle of competitive positioning

Competitive positioning as a factor to consider while establishing a marketing strategy has been
characterised as follows:

Positioning is the process of developing a business's offering and image in such a way that they
hold a relevant and unique competitive position in the eyes of its target consumers.

(2000) (Kotler, 1997)

Competitive positioning is fundamentally concerned with how customers in various segments of
the market perceive rival organisations, products/services, or brands. It is critical to remember
that positioning can occur at any of the following levels:

Companies: For example, in grocery retailing in the United Kingdom, the major competitors are
Tesco, Sainsbury's, and Asda, and positioning is based on their identities; products and services:
positioning also applies at the product level, as demonstrated by the comparison of the Dyson
vacuum cleaner to similarly priced products from Hoover and Bosch; brands: competitive
positioning is perhaps most frequently discussed in terms of brand identities:

Indeed, some examples demonstrate the critical nature of these levels in relation to one another –
Virgin, for example, is a company that embodies certain values in the minds of its customers,
which translates into the company's simplified financial services products and serves as the brand
identity for a variety of products and services.

In some respects, competitive positioning may be viewed as the result of businesses' efforts to
achieve successful competitive differentiation for their products and services.

However, according to Kotler (1997), not all competitive differentiation efforts will result in a
strong competitive position; differentiation efforts should fulfil the following criteria:

Importance – a distinction should result in a highly valued advantage for a sizable number of
clients; Distinctive and pre-emptive – the distinction should be difficult to copy or perform better
by others;

Superior – the difference should provide a superior method for customers to obtain the desired
benefit; communicable – the difference should be capable of being communicated to and
understood by customers; affordable – the target customers can afford to pay for the difference;
profitable – the difference will command a price that is profitable for the company.

The notion of the value proposition – the promise given to clients that embodies the position we
desire to take in comparison to rivals – is one method to describe the consequence of the search
for distinctions that matter to target customers and how we perform them in a distinctive manner.
For example, in the mid-1990s, Daewoo obtained 1% of the UK automobile market from scratch
in the quickest period ever recorded by a car manufacturer. The automobiles it offered were
unremarkable — they were rebadged versions of older General Motors designs. What set it apart
was an unambiguous and unequivocal value offer to its target market niche. The four pillars
around which this company's unique value proposition was built were as follows:
1 direct: interacting directly with customers rather than via conventional distributors and
remaining in touch throughout the purchase and usage of the goods; 2 hassle-free: clear
communication with customers and no sales pressure or price bargaining;

3 reassurance: all consumers pay the same price, and several items that were formerly provided
as optional extras are included in the package;

4 decency: exhibiting throughout the process an awareness of the customer's demands and
preferences.

On the strength of this concept, Daewoo soon built a strong competitive position in a certain
section of the automobile industry.

A competitive position may be established on any aspect of a product or service that provides an
advantage to the consumer in the market, but positioning places a strong focus on the fact that
what matters is customer perception.

Indeed, Ries and Trout (1982) popularised the word 'positioning' to refer to the creative process
that begins with a product. A product, a service, a business, or even a person... However,
positioning is not something that you do to a product. Positioning is what you do to the
prospect's thinking. That is, you place the product in the prospect's consciousness.

The Ries and Trout approach to the 'battle for your mind' is heavily focused on marketing
communications and brand image, whereas competitive positioning, as we have seen, is
somewhat broader in its recognition of the impact of every aspect of the market offering that
customers perceive as critical to creating distinctive value. To summarise the fundamental
philosophy, consider the following: You don't purchase coal, you buy heat; you don't buy circus
tickets, you buy thrills; you don't buy a newspaper, you buy news; you don't buy glasses, you
buy vision; and you don't sell items, you create positions.

Kotler's (1997) warning about the primary positioning flaws (Figure 7.3) that might weaken a
company's marketing strategy emphasises the critical nature of clear and powerful competitive
positioning:

Under-positioning: when clients have only hazy perceptions of a firm or its products and see
nothing distinctive about them, the product becomes a 'also-ran';

Over-positioning occurs when a customer's perception of a company, product, or brand is too

limited: Mont Blanc offers pens for many thousand pounds, however it is critical for the brand
that consumers understand that a Mont Blanc pen can also be purchased for less than £200;
 Confusion about positioning: frequent changes and contradictory messages may simply
confuse customers about a company's positioning: Sainsbury's indecision about whether
or not to have a loyalty card in response to rival Tesco's launch of its card, as well as
about its price level in comparison to competitors, contributed to its 1990s market
leadership loss; doubtful positioning: the claims made for the company, product, or brand
may simply not be accepted, whet the appetite for the company, product, or brand. British
Home Stores' objective of becoming 'the first-choice store for outfitting the modern lady
and family' failed in a market dominated by Marks & Spencer, notwithstanding the
latter's recent difficulties

1.5 SUMMARY

 The marketing plan explains in detail the steps that must be taken in order to carry out the
marketing program, and it takes a lot of time and effort to develop and implement.
 Market analysis is a wider term. If want to launch a product we should know the market
situation. Strategic planning is required to reach the goals.
 To achieve the goals we should know about the market situation, our competitors. The
process of strategic market planning may be quite complex.
 The planning process begins with an in-depth investigation of the organization's internal
and external settings, which is frequently referred to as a situation analysis, whether at the
corporate, business unit, or functional level.
 SWOT analysis focuses on the internal (strengths and weaknesses) and external
(opportunities and threats) aspects that provide the firm specific advantages and
disadvantages in serving the needs of its target market, as determined by the situation
analysis.

1.6 KEYWORD

Market: A group of customers or organizations that is interested in a product, has the financial
means to purchase it, and is permitted to do so by law and other laws.
Market Segmentation: Market segmentation is the practice of dividing a market into groups of
buyers with distinct demands, features, or behaviors who may require different products or
marketing mixes.
Microfinance Robinson (2001) defines microfinance as ―small-scale financial services
primarily credit and savings—provided to people who farm, fish or herd‖ and adds that it refers
to all types of financial services provided to low-income households and enterprises.
Entrepreneurship - An entrepreneur is a person who has possession over a new enterprise or
venture and assumes full accountability for the inherent risks and outcome. The term is a lone
word from French and was first defined by Irish economist Richard Cantillon A female
entrepreneur is sometimes known as entrepreneurs. However, Entrepreneur in English is a term
applied to type of a personality who is willing to take upon herself or himself a new venture or
enterprise and accepts full responsibility for outcome. (Veira, X. (2008).
Over-positioning - Over-positioning is a marketing failure whereby a brand, product or
service is too special such that it appeals to few customers. The term applies to a competitive
position or product differentiation that may strongly appeal to some customers but not enough to
reach a firm's sales targets.

1.7 LEARNING ACTIVITY

1. What is market analysis?

2. Define competitive research?

1.8UNIT END QUESTIONS

A. Descriptive Questions

Short Questions:

1. What is SWOT analysis?

2. What are types of competitors?
3. Why analysis of competitor’s strategies is important?
4. What is purpose of analyzing market situations?
5. Write the step in analyzing competitors?

Long Questions:

1. What are five C’s of market situation analysis?

2. What are advantages of market analysis
3. What are disadvantages of market analysis?
4. What are the elements of competitive analysis?
5. Describe market analysis and competitor strategies analysis.

B. Multiple Choice Questions

1. __________ Competitor who does not react in a predictable manner.

a. The Stochastic
b. The Tiger
 c. The Laid-back
d. The Selective
2. _______________is not a primary factors to consider when assessing the current market
situation.
a. Company
b. Advertising
c. Climate
d. Collaboration
3. An ___________ competitor is a corporation that provides similar products and services
to direct competitors, but with distinct ultimate goals.
a. Substitute competitors
b. Indirect competitors
c. Direct competitor
d. Replacement competitor
4. An __________ is defined as an external factor that has a favorable impact on or
contributes to a company's success.
a. Strength
b. Weaknesses
c. Threat
d. Opportunity
5. Market Situation Analysis should be based on _______ , hard, verifiable facts.
a. Cold
b. Hot
c. Soft
d. Warm

Answers

1-c, 2-c, 3-a. 4-d, 5-a

1.9 REFERENCES

References book:

 Marketing_Management_14th_Edition by Philip Kotler (Northwestern University) and

Kevin Lane keller (Dartmouth College)
 Principal of marketing 2nd European edition by Philip Kotler
 Marketing Management- Essentials of Marketing edited By Neha Tikoo
 Marketing Strategy by Ferrel Hartline

Websites:

 [Link]
 [Link]
competitors/48761
 [Link]
 [Link]