Competitor Analysis vs Blue Ocean Strategy
A competitor analysis is an assessment of the strengths and weaknesses of your businesses competitors. A competitive analysis is a critical part of your company marketing plan.
a) Knowing comparative advantages
The new set up company will seeking for information about the existing company in the current market. This is all about the future objectives which by comparing with any company's goals, attitude towards risk and the placed of the company in the future. Competitor need to establish the competitive advantage clearly so it will not only shows how they will accomplish their goals, but how and why their strategy will work.
b) Understanding competitor strategies
In this scope, the competitors have their own strategies to compete in the market. They will make sure that there is an opportunity to gain profit and stay safe in the market even though there are a lot of competitions. They also be focus on the impact of the strategy that had been taken either it make any changes in competitive structure. They tend to investigate about the capabilities of competitors in the industry.
c) Strategy selection
Key and assets plays major part in selecting the strategy. This is because strategy that are chosen in line with the capability and capacity of the firm. Advantage by having resources in rivalry, for example, pieces of the overall industry considered as esteem immaterial resources or information for instance to disarm contender which is did not have key and resources.
Steps in analyzing competitors
1. Identifying competitors
At this step, the firm faces a wide range competition. It is important to identify the current and potential competition. The firm should be careful to avoid “competitor myopia”. There are two methods to identify competitors. There are industry point-of-view method and market point-of-view method.
2. Assessing competitors
In order to assessing competitors, they need to determine competitors' objectives. If there are many competitors in the market, choose a handful of competitors that you believe are the largest threat to the organisation. Besides that, if there are too many competitors in the market, it can be identifying using classify them into strategic group. The most appropriate in the way of assessing competitors' strength and weaknesses is by using benchmarking which is comparing one's business processes and performance metrics to industry bests and best practices from other companies. Next, it is about estimating competitors' reaction on the things that you want to do.
3. Selecting competitors to attack or avoid
This fall on strong or weak competitors, that can be identifying using customer value analysis. There is a great opportunity then the competitor is weak, which mean they have less customers. Next, it is about close or distant competitors. In this scope, most company competes against close competitors. Then, it also about the “Good” or “Bad” competitors which will incurs the existence of competitors that offers several strategic benefits.
Understanding the market
Collect any flyers and price lists they produce for customers, read their online material, or even buy their products and services to compare them with your own. Economic climate
Captures the status of the stock market, the perception of the economy by consumers, and the availability of jobs and credit.
Better targeting customers
It might include a specific age instead of a range, a specific income level versus a large swath of income types, and the reasons these customers are most likely to purchase your products. Competitors pricing
Look at the prices set by other businesses in the same sector, and then adopting those numbers, plus or minus a few percent according to how your product looks that day by both competitively and strategically.
Market potential forecasting
For example, a company may be considering expansion into parts of the country where their product is not currently sold. Enables you to identify gaps in the market for products, services or initiatives.
Help you to make your products, services and marketing stand out.
Example of Competitors analysis
In village scenario, we often saw that a vendor or stall that selling the same merchants or food along the side of the road. For examples, stall Mak Cik Bedah selling “karipap inti sardine” meanwhile, stall Mak Cik Anyeh selling the same curry puff with the same flavor and price which is RM2 for 5 pieces. Therefore, under competitors analysis Mak Cik Anyeh make some adjustment to her recipe such changes in flavor and lower the price to RM4 for 5 and control over market share of curry puff in the village over Mak Cik Bedah. This is because she has a good capital, resources as well as labor.
Blue Ocean Strategy
Blue Ocean strategy is a new way of thinking a new strategic for improvement to tackle future market space and create new boundary and category. Blue Ocean Strategy is about how cans a company or an organization both create and free for competition in market space that makes competition irrelevant. Blue Ocean Strategy applies analytic tools in order to meet the objectives. there is free from rivalry to hoarded advertise shared by setting up new market opportunity and find new target showcase.
Core of the concept
To fundamentally shift the strategy canvas of an industry
The strategic focus must be reorienting from competitors to alternatives and performed from customers to non-customers
There are several types of analytic tools of blue ocean strategies:
It is invention in lowering cost and differentiation of product or services from existing market and target markets. The new system where by focusing on value to buyer where by an offering utility's price minus it's cost. So that, value innovation created. Disposing and decrease of figure the business contend of will prompt cost sparing where by exceptionally important to firm.
At the center of blue ocean strategy formulation is a structured four-step process created by Kim & Mauborgne that involves visual exploration where by allowed people's creativities to pushing's companies toward Blue Ocean Strategy. There is four major step under visualising strategy.
I. Visual Awakening
Making are examination amongst organization and others contender and looking for new market and set up new limit or new market space.
II. Visual Exploration
Creating Blue Ocean Path by understanding and observed current situation within the field. Observe the special value or advantages of alternative products and services. Therefore, the company will decide to make some improvement and reduce even changes into the product of services.
III. Visual Strategy Fair
In order to making improvement, feedback from clients or customers, stakeholder or potential investor are key in Blue Ocean Strategy. Thus, this feedback can be assets in term of information in future strategy.
IV. Visual Communication
Distribute your previously, then after the fact vital profiles on one page for simple examination. Bolster just those tasks and operational moves that permit your organization to close the crevices to realize the new system.
The strategy canvas is a graphically captures, in one simple picture, the current strategic landscape and the future prospects for a company. The strategy canvas serves two purposes:
i. To understanding the current state of play in the known market space, which allows users to clearly see the factors that the industry competes on and where the competition currently invests.
ii. To propel users to action by reorienting their focus from competitors to alternatives and from customers to noncustomers of the industry
Create uncontested market
This will lead to “win-win” situations. Create and capture new demand
To help seeking opportunity for new target markets and new space of market share.
Make competition irrelevant
Corporation between competitors are very strong due to company as a pioneer for new market space. Break the value-cost trade-off
An organization has the decision between making more an incentive for clients however at a higher cost, or sensible incentive for clients at a lower cost.
Align the whole system of firm's activities in pursuit of differentiation and low cost
Reach past existing interest which will pull in a bigger number of clients to pick your item instead of existing items. This will addresses the extension danger of amassing the best interest for the new advertising.
COMPARISON OF COMPETITORS ANALYSIS WITH BLUE OCEAN STRATEGIES
Scope Competitors Analysis Blue Ocean Strategy
Industry The competitors are competing in the existing market space. They tend to focuses on rivals within its industry. They apply the competitors' analysis to beat the competition.
Competitors create uncontested market space. They look across alternative industries which mean outside of their business scope. This is more on make the competition irrelevant.
Strategic Group Exploit existing demand by focus on competitive position within the strategic group.
Create and capture new demand by looks across strategic groups within the industries.
Buyer Group Focus on serving the buyer group. Redefines the industry buyer group.
Scope of product or service offering Focus on maximizing value of product and services offerings within the bounds of its industry. Looks across to complementary and service offerings.
Functional-emotional orientation Align the whole system of a firm's activities with its strategic choice of differentiation or low cost. They also focus on improving price performance within the functional-emotional orientation of its industry. Align the whole system of a firm's activities in pursuit of differentiation and low cost. They rethinks about the functional-emotional of its industry.
Time Focus on adapting to external trends as they occur. Participates in shaping external trends over time.
Cost Make the value-cost trade-off.
Break the value-cost trade-off.
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