DSpace at Khazar University

from suppliers who deal with both the analyst company and the competition, by
interviewing buyers, by recruiting and debriefing executives from competitor
companies, and by talking to journalists and other industry analysts. It is particularly
important to gain early information of a competitor's possible change of strategy, and
this may be signaled in a number of ways: by comment, by an unusual acquisition, by
announced personnel changes at the top, and so forth.
The competitor's culture is normally an important factor in setting limits to the
actions the competitor is likely to take in a market. An understanding of that culture will
reveal the way the company operates, and the constraints within which it often
subconsciously operates. A company's culture embodies the core values that executives
in the company take for granted, and an understanding of that culture can therefore be
very valuable to a competitor. In Chapter 6 we explore organizational culture in more
depth.
The objectives of the competitors are a fifth factor to be assessed in a competitor
analysis exercise. A company concerned to achieve short term financial objectives, for
example, is likely to react quite differently from one with longer-term market-share
objectives and willing to take perhaps a ten-year view to establish its position in the
market.
If the competitor is a subsidiary of a major corporation, it is also necessary to
understand the basic objectives of the parent. A company owned by the Hanson Group,
for example, will probably be far more constrained in terms of research and
development expenditure, or in adopting a new initiative with a long gestation time,
than would a company that is part of Shell, accustomed as the latter is to the high risks
associated with oil exploration. The level of autonomy the competitor possesses in
seeking to achieve its objectives is also relevant to the competitor assessment exercise.
Equipped with competitor information, the analyst will be in a strong position to
address key questions, as follows:
a. Is the competitor satisfied with its current market position, or is it likely to
become aggressive in the near future?
b. Where is the competitor most vulnerable?
c. Is it likely to change strategy in the near future? If so, how?
d. What action by us is likely to provoke the greatest least retaliation by the
60