Competition in the Golf Equipment Industry in 2008

Competition in the Golf Equipment Industry in 2008

MAIN ASPECTS OF COMPETITOR ANALYSIS

The key objectives in competitor analysis are to develop a greater understanding of what competitors have in place in terms of resources and capabilities, what they plan to do in their businesses, and how the competitors may react to various situations in reaction to what the firm does.

Michael Porter has defined a competitor analysis framework that focused on four key aspects: competitor's objectives, competitor's assumptions, competitor's strategy, and competitor's resources and capabilities.

The competitor's objectives and assumptions drive the competitor while the competitor's strategy and resources and capabilities define what the competitor is doing or is capable of doing. Together, these four aspects define a competitor response profile which gives the firm an understanding of what actions a competitor may take.

Competitor's Objectives

In competitor analysis there are two key factors to note in building knowledge of a competitor's objectives. The first factor is to know the actual objectives of a competitor. This could range from building market share in a specific market or overall business, entering a new market or even just maintaining profitability.

The second factor is to know if the competitor is actually achieving their stated (or sometimes unstated but implied) objectives. Looking at these two factors will provide a firm with an opinion on a competitor's potential actions to changes in the sector.

Some of the questions to ask for the competitor's strategic objectives are: What are the short-term and long-term objectives? What are the financial objectives? Where is the competitor investing?

Competitor's Assumptions

Another key aspect in competitor analysis is an understanding of competitors' assumptions about the overall market (trends in the market, products, and consumers). For example, competitors could define their actions based on what their assumptions are on the growth of the market.

Some questions to address for this aspect include: What is the competitor's viewpoint on the market and development? Who are the key consumers or clients who the competitor feels will be most profitable?

Competitor's Strategy

A third aspect in competitor analysis is the understanding of a competitor's strategy. A number of questions that need to be addressed are: What are the strategy and plans of competitors in their key markets? Which markets and products will the competitor focus on?

Competitor's Resources and Capabilities

Finally,