Strategic Management: Formulation and Implementation

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: