Assessing Competitors Strengths and Weaknesses
Can a company's competitors carry out their strategics and reach their goals? This depends on each competitor's resources and capabilities. Marketers need to identify accurately each competitor's strengths and weaknesses.
As a first step, a company gathers key data on each competitor's business over the last few years. It wants to know about competitors' goals, strategies and performance. Admittedly, some of this information will be hard to collect. For example, industrial goods companies find it hard to estimate competitors' market shares because they do not have the same syndicated data services that are available ro consumer packaged goods companies. Still, any information they can find will help them form a better estimate of each competitor's strengths and weaknesses.
Companies normally learn about their competitors' strengths and weaknesses through secondary data, personal experience and hearsay. They can also increase their knowledge by conducting primary marketing research with customers, suppliers and dealers. Recently, a growing number of companies have turned to benchmarking, comparing the company's products and processes to those of competitors or leading firms in other industries to find ways of improving quality and performance. Benchmarking has become a powerful tool for increasing a company's competitiveness (see Marketing Highlight 12.1).
In searching for competitors' weaknesses, the company should try to identify any assumptions they make about their business and the market that are no longer valid. Some companies believe they produce the best quality in the industry when this is no longer true. Many companies are victims of rules of thumb such as 'customers prefer full-line companies', 'the sales force is the only important marketing tool" or 'customers value service more than price'. If a competitor is operating on a significant wrong assumption, the company can take advantage of it.
Post a comment