Week 4

This week we explored competitor analysis. The word analysis bring up images of studying spreadsheets and long boring days or nights. Analyzing your competitors is a crucial step in that marketing plan process. Without this you will not know what you are up against in the market place which can be disastrous.

In the Lehmann and Winer book we are given an example in chapter 4 competitor analysis in the cell phone industry. At the time this book came out MP3 cell phones were the newest thing on the market. Things have changed quite a bit since then but the illustration was still relevant. In the book they compare Nokia, Motorola, and Samsung. We already know how these companies have done since this time. At the time Nokia was the leader but has not been able to hold onto the lead. Motorola needed to find a new phone after the Razr. Now they have a line of Razr phones that are doing well. Samsung’s vertically integration and “cool” factor were highlighted and these have both contributed to their success. Today Samsung and Apple are in a cutthroat battle for the top spot in this market.

Not too long ago Apple was head and shoulders above the rest of the market. When Lehmann and Winer put together this analysis Apple wasn’t even in the conversation. They came out of nowhere by making a huge innovation and giving customers what they wanted. Fast forward to 2013 and Apple is no longer the clear leader. Samsung has caught up and the two companies are in an all-out brawl to attract customers

 

With the more recent phone being produced by these companies, Samsung looks determined to see what is not available currently and work to give that to customers. Apple has been more concerned with improving on what they did with their last phone. It is this inward focus that I believe is leading them down the wrong path. While it is wise to fix or improve things that were not the best on your own product, that is not enough to stay ahead. They need to look outside of their own four walls. Samsung is beginning to introduce phones that are still small and sleek as their regular phones but also water resistant. They offer a feature where you can answer your phone without touching it or unlocking it by looking at it only your unique eyeballs. It’s hard to know exactly what Apple is coming up with right now because they shroud themselves in so much secrecy you would think they were producing military weaponry. There has been some leaks that have led to speculation that they will improve their sub par antenna with their next phone. It looks like they are also making a slightly slimmer looking phone and a larger screen. These are all aspects that Samsung is ahead of Apple in. Samsung’s Galaxy Note II has the largest screen on that market, is about the same thickness as the iPhone, and has a slightly better antenna design.

It seems that Apple is using more resources battle copyright infringement in court than they are in creating the next ground breaking phone. They have been working on an item the doubles as a wristwatch and a phone, think Dick Tracey.

 

Other companies are working on similar projects though. Even if Apple is the first to market with this, it won’t be long before another company has theirs available as well. I am an iPhone user and I like my phone. It is simple to use and already does more than I need it to do. There may be a time that I need more out of my phone and I’m not sure my loyalty to Apple is strong enough to stop me from getting a different brand phone. Time will tell, but this will be an interesting marketplace to follow the next few years to see who is watching their competitors and factoring their competitors’ actions into what they are doing.

I was surprised to read about how easy it can be for a company to obtain valuable information on their competition. Lehmann and Winer outlined over 20 good, legal, and ethical sources of data a company can use when researching its competition. Some of them seem obvious like talking to your customers and sales team or hiring consultants. They also talked about some less conventional, outside the box ideas. By becoming a shareholder, preferably a small one, you are given annual reports, 10k statements and a great deal of other information that would otherwise be unavailable. It seems so simple but also fruitful and fairly inexpensive. When you think that Samsung could have one of its employees buy a few shares of Apple stock which are currently trading at $440.99 per share and gain all of this information it seems like a no brainer. It is certainly less expensive than the 6 figure salary you will give to a consultant.

 

Another way to gain information is by taking plant tours. This is not a common anymore. Companies are not as willing to show people around their production facilities. When I was a sophomore I was taking a marketing course. We had a large group project in which all groups in class looked at the same local company that was facing some challenges and discussed what the issues were, how to fix the issues, and ways to innovate or grow. My group decided to take a tour of the production facility to gather more information for our analysis. The company was very hesitant to allow us to come in and take pictures. We gave them our names, the name of our professor who they knew well, and our course information. They were still a little skeptical. They did let us look around and they showed us a few things. During our visit one of the people at the plant called our professor to confirm with him that we were his students. We did not think for a second that it would cause any issue to look around the plant but our professor explained their why they were hesitant. A plant can tell you a lot about a company and also give you ideas of how to produce things more efficiently or how to do it better than your competition.