Competitive Environment

Description of Competitive Environment. Explanation.

Definition Competitive Environment. Description.

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:

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

Competitive Environment Forum (5)

Competitive Environment Definition
"How can we define the competitive environment in healthcare?
What is the impact of the competitive environment in healthcare services for both patients and healthcare workers?"

How to Analyse your Competitors? Steps in Competitors Analysis
"An approach that is often used in the process of competitors analysis exist of the following four steps:
1. Define the structure and the characteristics of the industry / sector (5 Forces)
2. Identify and analyse strategic groups, having a similar (or the same) strategy in the same market.
3. Identify, analyse and evaluate the most important competitors. A direct competitor is a company which sells products in the same market.
4. Anticipate on actions of your direct competitors. Strategic thinking and managing requires a business to be proactive dealing with the actions of competitors."

What is Competition? Two Meanings!
"Everyone knows what competition is approximately. But actually the concept of competition can have TWO meanings:
A. The Extent of Rivalry (Competitive Struggle) in a market: how strong is the battle in a market for the favor of the customers? In other words, how intense is the competition? A typical approach for this is Porter's 5 Forces Model
B. All individual competitors together: the collective name for all the competitors of a company.
Because of these two different meanings, a competition analysis normally consists of 2 components:
1. An analysis of the intensity of the competitive rivalry in a market, and
2. An analysis of the behavior of the individual competitors. This is known as competitor analysis."

Advantages and Disadvantages
"What are the advantages and disadvantages of being in a competitive environment?"