Part 1. Marketing Strategy
Published Online: 15 DEC 2010
Copyright © 2011 John Wiley & Sons, Ltd. All rights reserved.
Wiley International Encyclopedia of Marketing
How to Cite
Shankar, V. 2010. Competitor Analysis. Wiley International Encyclopedia of Marketing. 1.
- Published Online: 15 DEC 2010
Competitor analysis refers to the strategic evaluation of the strengths and weaknesses of current and potential competitors for a focal brand in its market(s) or for a focal strategic business unit (SBU) or firm in the corresponding industry(ies). Competitor analysis is part of a marketing plan and can be done at the product-market level, the SBU level, or the firm level. The main purpose of competitor analysis is to develop business and marketing strategies that are based on sustainable competitive advantage. When applied at the brand level, competitor analysis is useful in deciding whether to launch a new product and in formulating brand-positioning strategy. A good competitor analysis should include assessments of both current and potential future competitors. The most direct or relevant competitors can be identified based on an analysis of the market structure, which includes such considerations as similarity of served needs, substitutability, cross-price elasticity, switching costs, and perceptual positions. Competitor analysis is performed at intervals of a year or less. The term, competitor analysis, is used interchangeably with competitive analysis, although competitive analysis typically refers to the assessment of a business situation with a view to develop a sound business or marketing strategy relative to competitors.