Question

Analyzing competition is considered as a major part of the external environment analysis. Apply the different level of competitive environment analysis on a company of your choice within the following industries (Dairy, Telecommunication, or Fashion.)

Answer 1

Competitive environment analysis is the analysis of business competitors on various grounds or levels. The more the sellers of a similar product or service, the more competitive the environment would be. There are two types of competitors, direct competitors and indirect competitors. Businesses who sell same type of product or service as you sell are the Direct competitors. For example, Starbucks and Nescafe are direct competitors. Indirect competitors are those who sell a different service or product but still compete. Products or services of indirect competitors can be substituted for one another. For example, PepsiCo, Inc and Coca-Cola company are indirect competitors of each other.

Let's take our example of diary industry. There are a number of milk brands in India, such as Amul, Nandini, Mother Diary, Nestle India, Britannia Industries Ltd. and so on. All these milk companies try to sell their products through eye-catching advertisements. Prices of all these diary brands are relatively same. People can get many brands of milk in their nearest supermarket. Sometimes they have to choose which brand is good. Companies try to market their product by re-designing packets and adding more health related information that will attract customers to buy their products. If a customer is new, don't know which brand is good, in that case he tries all the available brands in alternative days. Then finally choose one brand which he/she likes most. There are also other diary products, like, butter, ghee, curd and cheese. The same milk brands deal with these products, once a company has established its brand name in the country or state, it becomes easier for it to sell its secondary products. So there is a prevalence of competitive environment in diary industry and the competition is manageable as the competitors are not huge in number.