This is NOT trivial because there are multiple levels of competition based on
how intensely and directly they compete
One approach is to identify competitors by customer choice (how they
compete for buyers)
A second approach is to cluster competitors into strategic groups (based on
similarity of their strategies, assets, competencies, and other characteristics)
IDENTIFYING COMPETITORS BY CUSTOMER CHOICE
What’s your favorite drink?
What if that drink wasn’t available? 2nd choice?
Now, imagine that it’s a hot day, and you’ve just raced across campus. What would
your choice of drink be? If not available?
Does your choice depend on application? What are the strategic implications?
Would a general model of customer choice be too simple?
IDENTIFYING COMPETITORS BY STRATEGIC GROUP
•This is a set of firms that pursue similar competitive strategies, have similar
characteristics, and have similar assets & competencies
•Can make process of competitor analysis more manageable
•Example: Wine industry: jug wine, premium wine ($10-$20), super-premium wines
•Determine the current profitability and potential or each group
•Of particular importance is emergence of a new strategic group!
BEST DIGITAL PRACTICE
T-Mobile: The Un-Carrier
Consumer frustration with perceived unnecessary costs and complexity in the wireless telecommu-
nications industry has long been prevalent. Yet among a market landscape dominated by rigid contracts
and layers of bureaucracy for customers, one company saw an opportunity for disruption. T-Mobile,
centered on not acting like a wireless carrier.
long overshadowed by AT&T, Verizon, and Sprint, decided to craft a unique “Un-carrier” strategy that
Since 2013, T-Mobile has introduced a series of improvements to consumer plans that emphasize
unlimited access to data, and allowing for faster phone upgrades. Though each campaign has differed,
simplicity, fairness, and value. These have included eliminating long-term contracts, instituting
the overarching Un-carrier strategy was designed to highlight T-Mobile's commitment to improving
T-Mobile has gained traction with the strategy through targeted brand positioning and creative
the wireless carrier experience beyond parity levels.
I'Mobiltting caps on data utilization, for example
, has historically allowed
carriers to maximize revenue.
T-Mobile observed that this frustrated consumers and thus decided to eliminate the common practice
of metering voice and text capabilities. By placing customer needs ahead of profit margins, T-Mobile
edge with technological advances, T-Mobile created a series of must-haves that other carriers weren't
was able to effectively separate itself within the market. Additionally, rather than trying to obtain an
set up to provide. One example was the company's willingness to pay the early termination fees of all
customers who switch to T-Mobile from other carriers. Ultimately, T-Mobile's goal was to be
everything that traditional players were not. To support this positioning the company generated a
series of humorous advertising spots highlighting why individuals were switching their plans over from
competitors. CEO John Legere also initiated a series of TED-talk style presentations that pointed to
the unique points of differentiation T-Mobile offered.
Chapter 3 Competitor Analysis 57
Within a year and a half of launching the campaign, T-Mobile had added 22.5 million subscribers
to its network. The company was also recognized as one of Fast Company Magazine's Most Innovative
a competitive analysis of the wireless telecommunications industry?
2. How can T-Mobile maintain its competitive advantage?
David Aaker, “5 Lessons from T-Mobile's Game-Changing Strategy," https://www.prophet.com/
Lauren Johnson, "How T-Mobile Trashed Its Own Industry and Gained 22 Million Subscribers in the
Process." Adweek, October 23, 2014, http://www.adweek.com/news/technology/how-t-mobile-trashed-
Ed Oswald, “10 of the Crazy Perks T-Mobile Offers," Cheat Sheet, November 16, 2015, http://www.
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