MSG Team's other articles

10762 Product Management vs Brand Management

Often, people get confused with the concepts of brand management versus product management. They tend to think that both are the same since they deal with a specific product being marketed and hence managed from incubation to sales. However, there are crucial differences in the way product managers and brand managers operate. For instance, brand […]

10953 Relationship Marketing with Business Associates and Partners

Business dynamics have forced the Organizations to recognize Customer as the most important factor responsible for its own existence and survival. Organizations have no option but to be customer centric. When we say that Organizations have to be customer centric, we are not only referring to the marketing and sales tuning in with the end […]

12259 Adapting E Business Model – It is Time to make that Paradigm Shift

Business Managers now a days are going back to the business schools to un-learn some of the lessons they had learnt during their class time days and build their ability to make paradigm shift in thinking. In today’s environment where technology and global business scenarios are changing, business rules are being re written. There is […]

12876 Consultative Sales Approach to Customer Objections

Being a good Salesman does not come easily to everyone. Out of thousands who take up a career in sales, there are a few hundreds who turn out to be mediocre salesmen pushing the product and chasing sales target and many more leave the field altogether. There are few, who carve out a brilliant trajectory […]

11244 Service Industry at Cross Roads

No one would have ever imagined fifty years ago that the service sector would become a major contributor to the economy world over. Surprising but true, that in America as well as in India or in UK, service industry has grown beyond our imagination and continues to grow. Globalization and the advancement of technology has […]

Search with tags

  • No tags available.

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

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:

  1. Threat of new potential entrants,
  2. Threat of substitute product/services,
  3. bargaining power of suppliers,
  4. bargaining power of buyers,
  5. Rivalry among current competitors.

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:

  • To study the market;
  • To predict and forecast organization’s demand and supply;
  • To formulate strategy;
  • To increase the market share;
  • To study the market trend and pattern;
  • To develop strategy for organizational growth;
  • When the organization is planning for the diversification and expansion plan;
  • To study forthcoming trends in the industry;
  • Understanding the current strategy strengths and weaknesses of a competitor can suggest opportunities and threats that will merit a response;
  • Insight into future competitor strategies may help in predicting upcoming threats and opportunities.

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.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

Cutting Costs Strategically

MSG Team

Corporate Governance – Definition, Scope and Benefits

MSG Team

Strategic Management: Core Competency Theory of Strategy

MSG Team