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Analysis of the competitive environment

Activity of competitors is important for business development. Each measure taken by firm involves response of other companies which are engaged in production and distribution of similar goods and services. Research of competitors is a necessary step for obtaining full information on the market environment in which the enterprise functions.
Activity of competitors is important for business development. Each measure taken by firm involves response of other companies which are engaged in production and distribution of similar goods and services.
Research of competitors is a necessary step for obtaining full information on the market environment in which the enterprise functions. Conditionally process of research of competitors can be divided into some stages which are presented schematically in figure 1.
Анализ конкурентной среды
Fig. 1. Process of research of the competitive environment
Let's carry out the complex analysis of the competitive environment on the example of firm "A".
The firm "A" is the partner of software developer on a platform 1C. In other words, the firm "A" acts as one of the regional representatives providing realization and technical support of the software. Programs on a platform 1C are demanded in the market and have no similar substitutes. The competitive environment in this case consists of the companies extending this production.

Identification of competitors

Анализ конкурентной среды The first stage of process of research is called "Identification of competitors". At this stage the main objective is the choice of the firms occupying essential shares of the studied market. The following sources of information can give help in the solution of this question: Internet, telephone reference books, fair brochures, information letters of developers, customer reviews etc.
For firm "A" 3 main competitors were allocated: firm "T", firm "Ts" and firm "C".

Assessment of competitive forces

Within this stage it makes sense to compare commodity proposals of competitors to own services and to allocate strong and weaknesses of each of them.
For an assessment of competitive forces comparative table 1 was made. As the prices of software products and their range are dictated by the developer, the analysis will be carried out on quality of service and rendering additional services in introduction and support of the software.

Table 1

Assessment of competitive forces
Name of the organization /
Criterion of comparison
Firm "A"Firm "T"Firm "Ts"Firm "C"
Consultations at the choice of the software++
Installation of the software++++
Control and introduction of software products++++
Updating of software products++++
Service of computers+
Training of users in features of the program+++
Providing consultations on work with the program++
Completion of standard configurations at the request of the user+++
Sale of educational and methodical literature+
Differentiation of the prices of technical support+++
Presence of the certified experts++
In table 1 the main activities which develop firms, being official representatives of software developer on a platform 1C are illustrated. The sign "+" marked existence of this direction at the concrete organization.
On the basis of the obtained data it is possible to allocate strong and weaknesses of competitors. Advantages and shortcomings of competitors are formulated in table 2.

Table 2

Strong and weaknesses of competitors
AdvantagesShortcomings
Firm "T"
Complex service of software productsThere is no opportunity to finish a configuration under needs of the consumer
Realization of educational and methodical literatureThere are no the certified experts
Flexible system of the pricesThere is no opportunity to get advice on work with programs
Flexible system of the pricesThe contract does not mean service of computers and a network of the enterprise in general
Firm "Ts"
Complex service of software productsThere are no the certified experts
Possibility of rendering consultations on work with programsThe tough price policy which is not considering need of clients
The contract does not mean service of computers and a network of the enterprise in general
Educational and methodical literature is not realized
Firm "C"
Flexible system of the pricesLack of possibility of complex service of the software
Presence of the certified expertsEducational and methodical literature is not realized
The contract does not mean service of computers and a network of the enterprise in general
Lack of possibility of training and consultations on work with software products of users
Having carried out the analysis of competitive forces, it is possible to pass to the following stage.

Assessment of competitive advantages

At this stage strengths of own company in relation to each competitor are marked out. The revealed data help to estimate own opportunities on a gain of the planned market niches, and also to allocate some directions for development of own business.
Competitive advantages of firm "A" in relation to each competing company are illustrated in figure 2.
Анализ конкурентной среды
Fig. 2. Competitive advantages of firm "A"
The scheme of competitive advantages of firm "A" provided on figure 2 shows that universal competitive advantage of the company in relation to all competitors is complex service of computers and the software. On the second place there are following positive sides: consultation on work with software products and existence in the company of experts with high qualification.

Search of the directions for development

Анализ конкурентной среды Considering the received information, it is possible to allocate the following main directions for development of the company:
  1. Positioning of firm "A" as the company providing a complex range of services from the help in a choice of the software product before technical and information support of the automated systems.
  2. Positioning of firm "A" as the companies which personnel consists of the certified and highly qualified specialists.
  3. Positioning of firm "A" as the companies which activity is focused on identification of the existing problems and needs of clients and search of decisions on their satisfaction.
  4. Development of the new directions of business. For example, realization of educational and methodical literature under the order, rendering consulting services in accounting.
The process of studying of the competitive environment given above is illustrated on the basis of data on firms representatives of the developer of programs 1C in the regional market. Depending on specifics and a field of activity a set of characteristics for comparison and the technology of detection of competitive advantages can change.
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