Speaker 1: Evaluating competitors' strengths and weaknesses There are many ways to analyze competitors including searching the internet and reviewing their websites and adverts and so forth. Another is using a key success factor analysis. This is used to compare a firm with competitors in the market on various important factors. The first step is to identify the key success factors in the industry to rate each firm on those key success factors and then lastly to consider the strategic implications of those success factors for each competitor. Number one, identifying key success factors for an industry. Success factors are those that have a significant impact on the performance of a firm in that industry. For each firm, these relate to things like assets and skills and the competencies that they need to compete. The better the fit between the firm's strengths and the industry's key success factors, the better. So in other words, if the company has strengths that relate directly to the key success factors in the industry, then they will do well. You usually want to try to identify six to eight key success factors. And there are a few examples. Project management ability, their global experience, do they have very innovative thinking and so forth. So how do you determine key success factors? Well there are some questions to ask. Why are successful competitors successful and others not? Those will reveal key success factors. What are the most important motivators of customers' choices in that industry? What's the most important thing to customers? Which phases in the production process and supply chain create the highest added value? So for example, Coca-Cola and the industry, the soft drink industry, a key success factor is the distribution network. How can they get all their products to all the various many places that sell soft drinks? Remember they have to get them to pick and pays, they have to get them to wholesalers like Macro, they have to get them into your corner cafes, 7-Elevens, they even need to get them into vending machines. So they need to have a very wide distribution network. And then also, what are the entry barriers in the industry? Those will also reveal some key success factors. Okay, here are some examples. Financial strength like grocery retailers, a very important thing as a grocery store is to have financial strength, lots of extra money. Flexible production, quick response time in the security industry, that's a key success factor. Many new innovations. If you're a cell phone manufacturer, you need to be able to innovate quite quickly to produce new types of technology and new cell phones. After-sales service in the car industry, that's important, that's a key success factor. Having a strong supply network that you can get supplies from. And then of course having an extensive distribution network like I shared earlier, the soft drink market and also the alcohol industry.