Question

can you give me short summary abstract and conclusion on chapters 3 and chapters 4 in Strategic Market Management, 9th Edition, by David A. Aaker

Competitor Analysis

Competitor Identification

Strategic Groups: Pursue similar competitive strategies –Have similar characteristics –Have similar assets and competencies

Competitor Analysis: Potential Competitors: –Market expansion –Product expansion –Backward integration –Forward integration –Export assets or competencies –Retaliatory or defensive strategies

Understanding the Competitors

Competitor Actions: Size, Growth & Profitability, Current and Past Strategies, Strengths and Weaknesses

Cost Structure: Exit Barriers, Organization and Culture, Objectives and Commitment, Objectives and Commitment

Relevant Assets and Competencies: What businesses have been successful over time? -What assets or competencies contributed    to their success? -What businesses have had chronically low performance? -Why? -What assets or competencies do they lack?

Relevant Assets and Competencies: What are the key customer motivations?   -What is needed to be preferred? -What is needed to be considered? -What is important to the customer, what assets and competencies represent industry mobility (entry and exit) barriers, What are the significant value added components in the value chain, Do any provide the potential to generate a competitive advantage?

Competitors can be identified by customer choice (the set from which customers select) or by clustering them into strategic groups (firms that pursue similar strategies and have similar assets, competencies, and other characteristics). In either case, competitors will vary in terms of how intensely they compete.

• Competitors should be analyzed along several dimensions, including their size, growth and profitability, image, objectives, business strategies, organizational culture, cost structure, exit barriers, and strengths and weaknesses.

• Potential strengths and weaknesses can be identified by considering the characteristics of successful and unsuccessful businesses, key customer motivations, mobility barriers, and value-added components.

• The competitive strength grid, which arrays competitors or strategic groups on each of the relevant assets and competencies, provides a compact summary of key strategic information.

Market/Submarket Analysis

Dimensions of a Market Analysis: Emerging submarkets, Actual and potential market and submarket size, Market and submarket growth, Market and submarket profitability, Cost structure, Distribution systems , Trends and developments, Key success factors

Customer Decision Process

Brand Relevance:

Select Product Category or Subcategory: SUV

Determine Brands to Consider: Lexus, BMW, Mercedes

Brand Preference:

Select Brand to Buy: Mercedes

Questions to Help Structure a Market Analysis:

• Submarkets Are augmented products, emerging niches, trend toward systems, new applications, repositioned product classes, customer trends, or modern technologies creating worthwhile submarkets? How should they be defined?

• Size and Growth Potentially important submarkets? Size and growth characteristics? Submarkets declining? How fast? Driving forces behind the trends?

• Profitability How intense is the competition among existing firms? Threats from potential entrants and substitute products? Bargaining power of suppliers and customers? Attractive/profitable markets or submarkets?

• Cost Structure Major cost and value-added components for several types of competitors?

• Market Trends

• Key Success Factors Key success factors, assets, and competencies to compete successfully? Can assets and competencies of competitors be neutralized?

Detecting Maturity and Decline: Price pressure caused by overcapacity and the lack of product differentiation, Buyer sophistication and knowledge, Substitute products or technologies, Saturation ,No growth sources, Customer disinterest

Porter’s Five-Factor Model of Market Profitability

Industry Profitability: Competition among Existing firms, Threat of Potential Entrants, Bargaining Power of Customers, Threat of Substitute Products, Bargaining Power of Suppliers

Risks of High-Growth Market:

Competitive Risk: Overcrowding, Superior competitive entry

Market Changes: Changing KSFs, Modern technology, Disappointing growth, Price instability

Firm Limitations: Resource constraints, Distribution unavailable

The emergence of submarkets can signal a relevance problem.

• Market analysis should assess the attractiveness of a market, as well as its structure and dynamics.

• A usage gap can cause the market size to be understated.

• Market growth can be forecast by looking at driving forces, leading indicators, and analogous industries.

• Market profitability will depend on five factors – existing competitors, supplier power, customer power, substitute products, and potential entrants.

• Cost structure can be analyzed by looking at the value added at each production stage.

• Distribution channels and trends will often affect who wins.

• Market trends will affect both the profitability of strategies and key success factors.

• Key success factors are the skills and competencies needed to compete in a market.

• Growth market challenges involve the threat of competitors, market changes, and firm limitations.

Answer 1

Core competency facilitates to have an access to a wide variety of markets as this helps to ensure that the product or service offered to consumers has the potentiality to offer greater value where the consumers are actually benefited by the end product or service and also needs to ensure that the competency is indeed very difficult and costly for competitors to imitate.

Most successful organizations have strong core competencies that they take advantage of to capitalize on their business and earnings. For example Amazon’s objective of being the most consumer centric enterprise globally personifies the core competency that facilitates them with competitive advantage over numerous other retailers.

Cost leadership helps to ensure products and services are being offered to customers at an economical price which entails an organization to improve its efficiency and effectiveness related to their business operations. Thus developing core competencies indeed facilitates business to gain competitive advantage with an augmented benefit of enhanced sales and revenues.

Thus through innovation developing good quality goods and services and conveying prompt and effective services indeed facilitates business to offer customers with excellent worth and value in terms of goods and services which in fact consumers acknowledges and pays back with faithfulness and trustworthiness which indeed is considered as an exceptional attribute that can be used for marketing the brand.

The performance of a business within a sub-market is straightforwardly connected to the ownership of key assets and skills. Thus an effective assessment and evaluation of strong performers should indeed facilitate to disclose the reasons behind such a flourishing track record.

Thus an effective analysis along with a careful study and review of unsuccessful organizations to evaluate the reasons behind their disappointment should indeed facilitate to provide a good view point of just what key assets and skills are in fact needed to be successful within a given industry and market segment.

Furthermore a competitor analysis tool indeed can facilitate an organization to develop an effective and efficient marketing strategy that in fact can assist in creating valuable and noteworthy assets and skills which they fail to possess and this in fact can facilitate the organization to endure and prevail a distinctive and long lasting competitive advantage.