RiDUCES and Competitor Analysis Flashcards
What is the purpose of RiDUCES
Describe the structure of a competitive space
assess opportunities and threats
analyze competitive behavior
identify competitive advantage
What is “competitive space”
The brands from your product segmentation chart
What are the areas that impact your competitive space?
Rivals, Downstream, Upstream, complementors, Entrants, Substitutes
How do you describe things that define industry structure
Things that tend to be fixed, unchanging, and static.
Things that a competitor can make strategic decisions on
What is the “perfect competition” market
Many sellers / rivals
Easy to enter / exit the market
many substitutes to the goods
no market power
horizontal demand curve (elastic)
What are imperfect competition conditions
Monopolistic competition
Oligopoly
Monopoly
What is a monopolistic competition
many rivals
easy entry / exit
many close substitutes
little market power
elastic demand
what is a oligopoly
few competitors
difficult to enter / exit market
identical or differentiated goods
some market power
downward demand curve
what is a monopoly
one seller
difficult to enter / exit
no close substitute
a lot of market power
downward demand curve
how does regulation level impact the market structure
low - not a lot of regulation - lawn mowing
high - lots of regulation - aviation / healthcare
Best way to determine market competition
HHI - Herfindahl-Hirschman index
add up all the squared market share percentages
1500-2500 : moderately concentrated
2500+ : Highly concentration
Why are Opportunities and Threats important to a market?
Opportunities can drive up demand
Threats can drive down demand
When describing the competitive space, what is involved in Rivals
Concentration of competitors
Diversity and differences of competition
brand identity
Industry growth
exit barriers
switching costs
When describing the competitive space, what is involved in downstream
brand identity
switching cost
product differences
impact on quality/perfomance
likelihood of backward integration
buyer concentration
When describing the competitive space, what is involved in upstream
supplier concentration
differentiation of suppliers
threat of forward integration
importance of volume
impact of supplies on cost
supply cost relative to total cost
