Competitor+Analysis+and+sources+of+advantage


 * Marketing 28th September, 2010 :**
 * Summary of Participation vs. Traditional View**

**Traditional:** There is a fully formed product prior to the product introduction. The target segment, differentiating benefits, competitive advantages, and barriers to entry are all identified prior to the product introduction. Product, price, place, and promotion are initially fixed and participation is used for input to new ideas. The revenue model is defined prior to the introduction. **New Market:** No clear segment is identified. Segment forms based on participation data. Differentiating benefits are largely identified and initial competitive advantage is identified. Product, place, price, and promotion are flexible and participation is used to focus the 4 p's. Revenue model is unclear

Value proposition should be defined based on benefit profile of target market. Ideal value proposition should appeal to customer's strongest decision making drivers.
 * Introduction of Value Proposition**

// - No market leaders (For digital music – recipe for success) // // - Cost per song ( cd - $5, flash - $10 , MP3 CD - $ 1, Hard drive - $0.3) // // - Quantum leap in feature – IPOD // // Selling points for IPOD // // - Portable (Ultra thin hard drive) – 5Gb – 1000 songs at 160 k bit rate – 20 min skip protection // // - Firewire – 30 times faster // // - Battery - 10 hours rechargeable lithium – fast charge 80% // // - Charges over firewire // // - 10 hours of continuous songs // // - Ultra portable // // - Apple design //
 * Apple IPOD Value Prop video**:

Oral Presentation Requirements

Written Assignment Requirements


 * Powerpoint presentation**

**Market Selection-Industry Analysis :** The Porter's Five Forces for profitability in any industry include three of external competitive sources (threat of new entry, intensity of competitive rivalry, threat of substitute products or services) and two internal competitive sources (bargaining power of consumers and bargaining power of suppliers). **Competitor Analysis** Competitor analysis is an assessment of the strengths and weaknesses of current and potential competitors. It provides both an offensive and defensive strategic context through which to identify opportunities and threats. **Competitive Advantage** A competitive advantage enables a business to create a superrior value for customers and superrior profits for itself. Business could essentially have cost advantage, differentation advantage or marketing advantage. The competitive advantage should be always inline with the branding. For example, Apple's competitive advantage is through differentiation - which is inline with all of its products.
 * Threat of new entry: Profitable markets will attract new firms. This results in many new entrants.
 * Intensity of competitive rivalry: the major determinant of the competitiveness of the industry
 * Threat of substitute products or services: the excistance of products besides the firm increases the propensity of customers to switch to alternatives
 * Bargaining power of consumers: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes.
 * Bargaining power of suppliers: suppliers of raw materials, components, labor, and services to the firm can be a source of power over the firm, when there are few substitutes.

**Cost Advantage** Cost advantage in services or product means having significant reduction of the cost (not prices) to create lower prices while still achieving desirable profit margins. We can achieve a lower variable cost or a lower marketing cost or a lower operating and overhead expense. The Variable Cost or unit cost in reduces as the total number of goods produced increases (//scale effect//). We can also reduce the variable cost through innovative methods of cost cutting, and through //scope effect// and //learning effect//. The marketing cost advantage can be achieved through product line extensions and advertising cost efficiency of brand extension strategy. By defining a seamless process and operating strategy, the operating expenses can be significantly reduced. For example, Toyota has acheived considerable cost reduction through "Just In Time" production or Toyota Production System - which preserved value with less work. **Differentiation Advantage** A meaningful differentiation creates desired customer benefits at a level superrior to those of competitors. This can be done through product advantage, service advantage or reputation advantage.

**Marketing Advantage** Marketing advantage is dominating the competition through brand recognition, product line, and channels of distribution. Knowledge advantage also falls under marketing advantage. This is an often under appreciated advantage though it can often be the most important. Having a strong familiarity and understanding of the needs and wants of the customer can be invaluable. Each one of these advantages has his own customer, for example if you choose the cost advantage you will not be competing with companies that have the marketing advantage because customers for each are different.

SWOT Firsts -Strengths -Weaknesses -Opportunities -Threats

SWOT Seconds

Summary