Competitive Environment

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What is a Competitive Environment? Meaning.

The Competitive Environment is the part of a company's external environment that consists of other firms trying to win customers in the same market. It is the segment of the industry that includes all immediate rivals.

Levels of Competition

With regard to competition, there are at least four levels that can be distinguished:

  1. Product Competition. This is competition focused on the same market segment. For example: Diet Pepsi and Diet Coke.
  2. Product Category Competition. This is between products with the same characteristics, such as various soft drinks.
  3. Generic Competition. This is competition between products that respond to the same needs of customers, such as drinks.
  4. Budget Competition. This competition is for the money of the customer (share of wallet), such as between food and entertainment.

To analyze the strategic position of a firm in its industry and compare it with its direct and indirect competitors we can use a technique called "Strategic Group Analysis".

To analyze the positioning of a firm or brand in the minds of the consumers and compare it with its competitors we can use a technique called "Perceptual Mapping".

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Competitor Analysis: Strategic Group Analysis and Mapping
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What is Competition? Two Meanings!
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How to Analyse your Competitors? Steps in Competitor Analysis
An approach that is often used in the process of analyzing competitors exist of the following four steps: 1. Define the structure and the characteristics of the industry / sector (5 Forces) 2. Ident...
Four Levels of Competition (Kotler)
Competition, a critical factor in marketing management, comes from companies providing actual and potential rival offerings and substitutes that a buyer might consider. Although this may seem rather o...

Best Practices

The best, top-rated topics about the Competitive Environment. Here you will find the most valuable ideas and practical suggestions.

🥇 Advantages and Disadvantages
What are the advantages and disadvantages of being in a competitive environment?...
🥈 Macro Enviroment vs Competitive Environment
What are the main differences between the macro environment and the competitive environment?...

Expert Tips

Advanced insights about the Competitive Environment. Here you will find professional advices by experts.

How to Avoid a Price War? Alternatives

Price Wars, Competitive Strategy, Price Dumping, Lowering Prices, Buying Market Share, Price Cutting
In a battle to capture the customer, companies use multiple tactics to ward off competitors. Price is often a weapon of ...

The Role of Competitors in Strategy and Business Failures

Competitive Strategy, Competitive Environment, Competitive Intelligence, Industry Analysis
Gilad (2014) researched in what way and to what extent competitors do matter. Many people believe that competitors are o...
Information Sources

Various sources of information regarding the Competitive Environment. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Managing Competitive Intelligence

Competitive Intelligence, Business Intelligence
Presentation that gives an introduction into Competitive Intelligence: definition, its usage, its process and best pract...

External Environment In-depth: Sub-types and How to Manage Them

External Environment, Environmental Scanning, Environmental Management, Competitive Environment
This presentation covers the topic of external environments and includes the following sections: 1. Environmental Scann...

PEST Analysis for Small and Medium-sized Companies

Initial Understanding of PEST Analysis, Summary
Ian Johnson summarizes the PEST Framework in the context of Small and Medium-sized Companies. PEST is an acronym to ana...

Interview Porter: How to Apply the Five Forces Framework?

Applying the 5 Forces for Fundamental Industry Analysis
Interview Michael E. Porter, Professor at Harvard University on The Five Competitive Forces That Shape Strategy. Topics:...

Strategic Group Mapping

Strategic Group Analysis, Competitive Analysis, Analyzing Strategic Competitors
Good introduction into strategic group mapping....

Interview Michael Porter: Getting Started with the 5 Forces and Involving Everybody

Initial Understanding of Industry Analysis
Interview Michael E. Porter, Professor at Harvard University on The Five Competitive Forces That Shape Strategy. Topics:...

Research Links

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Compare with: Five Competitive Forces  |  Industry Attractiveness  |  Competitive Advantage  |  Shared Value  |  PEST Analysis  |  Strategic Fit  |  Benchmarking  |  Oligopoly  |  Competitive Pricing  |  Competitive Position  |  Competitive Intelligence  |  Barriers to Entry  |  Globalization  |  Cartel  |  Horizontal Integration  |  Horizontal Merger  |  First Mover Advantage  |  Second-mover Strategy  |  Blue Ocean Strategy  |  Macro-Environment  |  Market Segmentation  |  Glocalization  |  Positioning  |  Organizational Resilience  |  Time to Market

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