One of the main factors in determining the success of a company is the way that they analyze their competitors. A company’s competition is not simply made up of the rival companies that make the same products, but also the companies that create products that act as supplements to their products. Above is a diagram that shows the competition analysis process that a company must go through before creating the customer relationships that will make it successful.
Each of the three steps in analyzing a customer is made up of subcategories that the company must address. Within each category are questions that a company must ask about their competitors, to fully understand its own position within its desired industry. To further explain the concept of competitor analysis I have included a graphic below capturing how iProjector, the product developed by my marketing group, completed its competitor analysis:
Before coming up with our product, my marketing group first identified a consumer need we wanted to address. The consumer need then morphed into our company and competitor objective: Providing consumers with a solution to problems that occur when they are sharing information with their smartphones. Once the objective was defined, two main competitor’s arose in the Samsung Galaxy Beam and the HDMI Pocket Projector.
After selecting our product, my marketing group and I identified the competing products that iProjector would face in the industry. iProjector’s objective is to not only offer consumer’s a more convenient way to share information, but it hopes to hold the position of industry leader. First, we researched the Samsung Galaxy Beam as the main competitor for our product because it is in the same strategic group as iProjector. As defined by Kotler and Armstrong in Principles of Marketing, “a strategic group is a group of firms in an industry following the same or a similar strategy un a given target market” (p. 529). The Galaxy Beam is a smartphone that has a built-in projection feature, similar to the iProjector, and therefor is a member of the same strategic group. The strategy utilized by both products allows smartphone users to more easily share information without the need for an additional device. In contrast, the HDMI Pocket Projector is in a completely different strategic group, as it is an additional product that needs to be purchased to make sharing information through a smartphone more adaptable to customer needs.
Next, it was beneficial to identify the strengths and weaknesses of our competitors to determine whether or not iProjector was capable of entering the market. Both products are already released into the market, which proves to be a strength as they are already established place holder’s in retailers and consumer’s minds. An additional strength that is the price. As stated in the iProjector Market Analysis, the Pocket Projector doubles as a charger for the iPhone and can be purchased from Brookstone stores for about $130 (p. 13). In contrast, the availability of the Samsung Galaxy Beam and price act as weaknesses for the competitor. The Beam is currently only available on reseller websites like Amazon and eBay for prices around $600 (p.13). In contrast, the iProjector come standard in new versions of Apple devices (iPhones, iPads, etc.) and will not cost the consumer more than the standard device price. Additionally, the extra purchase associated with the Pocket Projector is seen as a weakness for the competitor, compared to iProjector and the Galaxy Beam, that are contained inside the devices they work with.
Upon entering the market, the competitors of iProjector must make the decision whether they will take action or continue using the same strategy they adopted before iProjector existed. My marketing group anticipated that Samsung will take action and Pocket Projector will continue with the same strategy. Because it occupies a place in the same strategic group, the Galaxy Beam will need to increase their availability to consumers in order to remain a competitor. On the other hand, the Pocket Projector is a competitor in the aspect of allowing consumers to share information but they are not implementing its projection features into the smartphones themselves and therefor will not need to change its strategy. iProjector will depend on the loyal Apple customers to assist them in penetrating the market and forcing its competitors to react or disappear.
When determining whether a competitor is strong or weak, it is important for a company to take into consideration the customer value analysis. Once again referring to the Principles of Marketing text, Kotler and Armstrong define customer value analysis as “an analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors’ offers” (p. 531). In creating our market analysis, my marketing group and I discovered that the customers we were targeting valued the convenience and price that would be associated with the iProjector product. With this in mind, both competing products can be considered weak and strong. The Samsung Galaxy Beam exudes strength in its convenience of not needing additional accessories, and weakness in the lack of availability to customers and high price. In contrast the Pocket Projector is strong competition in the price arena and a weak competitor when it comes to convenience. The iProjector product took into account all aspects of the customer value analysis and made a product that is reasonably priced as well as convenient for customers.
Due to the similarities in product features and qualities, the Samsung Galaxy Beam is a close competitor to the iProjector. Rather than trying to destroy the close competitors, iProjector and the industry as a whole would benefit from healthy competition. In contrast, the Pocket Projector is a distant competitor because it allows customers to achieve the same objective of sharing information but it embodies a completely different way of doing so by acting as an additional accessory, creating distance in competition. The presence of competitors is healthy and promotes innovation. In order for competition to remain positive, all competitors much be considered good competitors who do not break the rules in attaining market share; Samsung and the Pocket Projector are both considered good competitors.
As one can see, the competitor analysis is an extensive process that must occur in order to promote the success of a company or product. Not completing a competitor analysis before entering a market burdens a company with unnecessary burdens and makes it almost impossible for them to compete. Competitors are not just the products that look the same, but are also the products that offer the same benefits and allow customers to reach the same objective through other means. Competition can be both beneficial and detrimental to a company.