Exam Prep: TU Marketing
Topic: Competitor Analysis

Unit 5: Competitor Analysis

* Focus: Assessing rival strengths/weaknesses to identify strategic opportunities and threats.

1. Core Definitions (Entry Points)

Competitor Types Direct: Same products (Coke/Pepsi). Indirect: Substitutes. Phantom: Hard to identify, shift with economy.
Market Leader Possesses the largest % of total sales revenue.
Market Challenger No. 2 or No. 3 firm aggressively attempting to expand share.
Market Follower Allows dominant firms to lead; seeks to copy/improve.
Market Nicher Serves narrow market ranges with highly customised products.

2. High-Yield Strategic Points

Role Strategies

  • Leader: Defend share, expand total mkt via new users.
  • Follower: Clone, Imitate (copy elements but change package), Adapt (improve product).
  • Nicher: Target well-defined customers with unique demands for high profit margins.

Challenger Attack Moves

  • Frontal: Target leader's main strengths.
  • Flank: Target competitor's weaknesses.
  • Encirclement: Simultaneous attack on all fronts.
  • Bypass: Target easier, untapped segments.
  • Guerrilla: Intermittent, unconventional.

Nepal Context (Score High!)

Post-2046 B.S., open markets ended Rana/Panchayat monopolies. However, issues remain with Cartels and Syndicates (esp. in transport) restricting true competition. MNCs dominate over small cottage industries.

Bases of Industry Comp.

  • Number of sellers & product diff.
  • Entry, mobility, and exit barriers.
  • Cost structures & vertical integration.

3. Visual Blueprints (Must Draw!)

Model 1: 5-Step Analysis Process
1. ID Competitors (Customer/Strategic) 2. Analyse Strategies (Profit, Mkt share) 3. Assess Strengths/Weak (Production, Sales) 4. ID Reaction Patterns (Tiger, Stochastic...) 5. Design Intel System (Set up, Collect, Eval)
Model 3: Challenger Attack Directions
Market Leader 1. Frontal 2. Flank 3. Encircle 4. Bypass New Mkt 5. Guerrilla
Model 2: 6 Market Leader Defence Strategies
Market Leader 1. Position Defence (Guard successful brands) 2. Flank Defence (Guard weak fronts) 3. Pre-emptive (Attack before enemy starts) 4. Counter-Offensive (Hit attacker's weakness) 5. Mobile Defence (Broaden into new territory) 6. Contraction (Withdraw from weak segs)

4. Exam Triggers & Keywords

High-Probability Questions:

  • 15-Mark Triggers:
    - Discuss process of competitor analysis & strategies for a market leader (Draw Model 1 & 2!).
    - Explain different attack strategies a challenger can adopt (Draw Model 3!).
  • 5-Mark Triggers:
    - Define types of competitors (Direct/Indirect/Phantom).
    - Explain competitor reaction patterns.
    - Discuss market follower strategies.

"Must-Include" Keywords

  • Tiger Reaction: Immediate, aggressive response to any competitive move.
  • Stochastic Reaction: Unpredictable/non-linear response.
  • Bypass Attack: Indirect strategy focusing on untapped/easier markets.
  • Syndicate/Cartelling: Collective agreements to restrict competition (common in Nepal).

5. Final Review Canvas

1. Topic Overview

Competition is rivalry for revenue/profit growth. Systematic analysis is essential for identifying threats/opportunities by assessing rival strengths, weaknesses, and reaction patterns (Tiger, Laid-back).

2. Strategic Framework

Firms occupy 4 roles: Leaders (defend/expand), Challengers (attack via Frontal/Bypass), Followers (Clone/Imitate), and Nichers (specialise). Roles dictate specific offensive/defensive moves.

3. Nepal Practical Context

Post-2046 B.S. liberalisation ended state monopolies, introducing MNCs. Yet, the market faces challenges from "unhealthy" competition, transport syndicates, and cartelling across sectors.