Role of Governments in International Businesses
The Need to Encourage Foreign Investment The previous articles have discussed how international businesses need supporting ecosystems and business friendly policies if they are to succeed in emerging markets. Of particular importance is the role of governments in deciding whether they would allow international businesses to setup their operations and encourage them to grow and […]
Important Regulations in Investment Banking
Most of the investment banks in existence today have been around for several decades. For much of this time, the investment banking industry has been a haven for unprecedented growth. The industry has seen many risky practices to evolve periodically. This is why the investment banking industry has often been under the scrutiny of the […]
The COSO Framework for Internal Control
Internal frauds are a big part of the operational risk faced by any organization. This is truer of multinational companies who have business interests in various countries across the globe. This is because there are thousands of people in important positions making business decisions on behalf of the company. Hence, ensuring that all these employees […]
The Optimal Size of a Sports League
There are a large number of sporting leagues around the world. However, when we study all the leagues, we find that each of them has around 10-20 members who are playing in the top professional class of leagues. There are very few events such as the FIFA World Cup soccer where 50+ teams participate in […]
Leadership by Optics Management: Taking the Howdy Modi Event as a Case Study
What is Leadership by Optics and Perception Management and the Leaders excelling at it? In times when media is so predominant and overweening as far as setting the agenda for leaders and for almost everyone are concerned, it is very tempting, indeed irresistible for leaders to forego the temptation to manage the headlines on a […]
Organizations must operate within a competitive industry environment. They do not exist in vacuum.
Analyzing organization’s competitors helps an organization to discover its weaknesses, to identify opportunities for and threats to the organization from the industrial environment.
While formulating an organization’s strategy, managers must consider the strategies of organization’s competitors.
Competitor analysis is a driver of an organization’s strategy and effects on how firms act or react in their sectors.
The organization does a competitor analysis to measure/assess its standing amongst the competitors.
Competitor analysis begins with identifying present as well as potential competitors. It portrays an essential appendage to conduct an industry analysis.
An industry analysis gives information regarding probable sources of competition (including all the possible strategic actions and reactions and effects on profitability for all the organizations competing in the industry). However, a well-thought competitor analysis permits an organization to concentrate on those organizations with which it will be in direct competition, and it is especially important when an organization faces a few potential competitors.
Michael Porter in Porter’s Five Forces Model has assumed that the competitive environment within an industry depends on five forces:
These five forces should be used as a conceptual background for identifying an organization’s competitive strengths and weaknesses and threats to and opportunities for the organization from it’s competitive environment.
The main objectives of doing competitor analysis can be summarized as follows:
Competitors should be analyzed along various dimensions such as their size, growth and profitability, reputation, objectives, culture, cost structure, strengths and weaknesses, business strategies, exit barriers, etc.
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