A Framework For Competitor Analysis

A central aspect of strategy formulation is preceptive competitor analysis. There are four diagnostic components to a competitor analysis: future goals, current strategy, assumptions, and capabilities. A basic framework for performing individual competitive analysis has been postulated by Michael Porter.

Future Goals

As can be seen, two factors must be analyzed to determine what drivers the competitor. First, its future goals must be identified. A knowledge of goals will alow predictions about whether or not each competitor is satisfied with its position and financial results, and how likely that competitor is to change strategy.

The following diagnostic questions help to determine a competitor's present and future goals:

  • What have the competitors's major goals been in the relatively recent past?
  • Have these goals been achieved?
  • What strategies has the competitor employed in the relatively recent past?
  • Have these strategies been successful?

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Business And Its Environment
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