Selecting Competitors to Attack and Avoid

It is very vital that a company have an idea of how to choose competitors to attack and avoid. Weak or Strong competitors can be attacked.  Weak competitors are simpler targets but less profitable. Succeeding against powerful competitors frequently provides greater returns. A useful tool for assessing competitor weaknesses and strengths is customer value analysis. The goal of customer value analysis is to find out the benefits that target customer's value and how customers rate the relative value of different competitors' offers.

Steps in conducting customer value analysis include following:

1.   Recognize the major attributes that customer's value and the significance customers place on these attributes.
2.   Assess the company's and competitors' performance on the valued attributes.

Distant or Close competitors can be targeted. A company actually needs and benefits from competitors.

Benefits of competition include following:

1.   Competitors can help to increase entire demand.
2.   They can share the costs of product and market development and help to legitimize new technologies.
3.   They can serve less-attractive segments or lead to more manufacture differentiation.
4.   They lower the antitrust risk and develop bargaining strength versus labor or regulators.

A company cannot view all competitors as beneficial. "Bad" or "Good" competitors also provide chance and different threats. Good competitors play via the rules of the industry while bad competitors break the industry rules.