To properly address this crucial point, IBM will present in the next section Porter’s Competitor analysis as platform for measuring competitors’ ability and influence on our innovation. The analysis consists of four sections, and they are as follow: Future Goals, Assumptions (they help to determine Competitors Drivers), Current Strategy, and Capabilities (they help to determine what the competitors will do). Future Goals: this factor helps to determine the competitors’ management ability to predict their business environment and identify any future fluctuations in the market condition.
Both Sony and Amazon have strong insight and understanding of the marketing opportunities, and they have the ability to sustain sudden future events in the market. As for our company IBM, has also the ability to capture new opportunities as we did with our product WRD. WRD has been designed in a way that can provide IBM future expansions to other Asian markets in the region. In the case of our current competitors in the market Sony and Kindle, their position is not so well established.
As these two companies target the general public and not a specific segment in the Malaysia, therefore their exact position cannot be determined as strong or weak. In case of our company IBM, we argue that our position is not different from our competitors, but our specification to the target market will help as establish strong roots in the education sector. Porter argues that a company planning its strategy will harvest enormous success later.
As this factor can be considered the backbone of a particular company because it will integrate its financial aspects with its operational aspects, hence maximizing its chances of success. Both Sony’s and Kindle’s strategies indicate that the companies tend to dominate the market through their brand name. As they believe the brand name is more than enough to influence the target audience. This is true and advocated by Lovelock et al (2002), however the same author argues that brand must reflects the efficiency of the product itself to achieve success.
In latter sections of this report, IBM is going to demonstrate in details how our product will establish a stronger link with its user more than Sony and Kindle, and the reason is because our company has followed and conducted the correct Market Mix (4P’s). Capabilities: Porter has argued that in order to understand the competitor capabilities, it’s important we study their resources and credentials and how they can use it for the development of their business operations.
The aspects of resources may from one industry to another; however, the main elements are financial, geographical, human resource, and general managerial ability. Both Sony and kindle have enormous resources of all above aspects. However, it’s a fact that IBM has the same influence too and particularly in the Asian market. The distinction that IBM will have will be in the product it self, and how it will function in a way that will capture its target audience immediately. That is not mentioning IBM’s creativity when it comes to creating practical solutions for Technology-Business problems.
Competitor Response Profile: This last factor will combine all other four factors together to determine what IBM competitors will do once our product will out in the education market. Porter has argued that there will two possible actions: Offensive Move: which consists of series of actions that Sony or Kindle may take once the product is out. The actions may include a slight change in their business plans for the Asian market because they do not feel threatened by our product, hence developing a sense of safety regarding their position in the market.
Defensive Move: which consists of a series of actions that Sony or Kindle may take once the product is out. The actions may include from of retaliation to their product and service. In other words, Sony and Kindle will implement dramatic changes to their strategies in order to cope with the appearance of our product (WRD). Furthermore, the changes can not only be taken from marketing prospective, but they also may change the specification of their products to tempt and shift our target market users (Education) to their target market (Normal Users). The diagram below illustrates the components of competitor analysis.