## Competitive Strategy

Definition: Competitive strategy defines how a firm expects to create and sustain a competitive advantage over competitors.

Analyzed using two criteria:

1. Creation of competitive advantage

2. Protection of competitive advantage

> Porter's Five Forces model is useful for systematically diagnosing the main competitive pressures — even though pressures vary across industries, the competitive process works similarly enough to use a common framework.

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## Competitive Landscape

Definition: A business analysis that identifies competitors — direct or indirect.

Understanding competitive landscape requires applying "competitive intelligence" — structured gathering and analysis of information about competitors.

### Steps to Understand the Competitive Landscape:

Step	Key Question Answered
Identify competitors	Who are the competitors and how big are they? (market share data)
Understand competitors	What products/services do they offer in different markets?
Determine their strengths	Financial position? Cost/price advantage? Future moves? Distribution network? HR strengths?
Determine their weaknesses	Identified via consumer reports, reviews, and annual reports
Synthesize all information	What are they NOT offering? What gaps can the firm fill? What improvements does the firm need? How can the firm exploit competitor weaknesses?

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## Key Factors for Competitive Success (KSFs / Key Success Factors)

Definition: KSFs are the things that most affect industry members' ability to prosper — strategy elements, product attributes, resources, competencies, and capabilities that spell the difference between profit and loss.

### Three Questions to Identify KSFs:

1. On what basis do customers choose between competing brands? What product attributes are crucial to sales?

2. What resources and competitive capabilities does a seller need to be competitively successful?

3. What does it take for sellers to achieve a sustainable competitive advantage?

### Key Rules About KSFs:

KSFs vary by industry and over time within the same industry (driven by changing conditions)
Rarely more than 3–4 KSFs exist at any one time; usually 1–2 outrank the rest in importance
An organization with perceptive understanding of KSFs and strategy trained on those KSFs can gain sustainable competitive advantage

Worked example

### Example 1

KSFs in Budget Aviation:

For a budget airline, KSFs include: (1) quick aircraft turnaround times (operational efficiency that enables more flights per plane per day), (2) high seat load factors (maximizing revenue per flight), and (3) ancillary revenue streams (baggage fees, seat upgrades). An airline that masters these three consistently outperforms rivals.

Note: Superior in-flight food is NOT a KSF for budget aviation — it does not spell the difference between profit and loss in this segment.

### Example 2

Competitive Landscape Analysis — Telecom:

A new telecom entrant conducting competitive intelligence on Airtel and Jio would:

Identify: Airtel leads in 5G coverage; Jio leads in subscriber base
Strengths: Jio's pricing agility; Airtel's premium customer retention
Weaknesses: Both have limited rural last-mile connectivity
Gap to exploit: Offer affordable rural broadband, where neither competitor has strong presence

This answers: 'What are they NOT offering?' → opportunity identified.

⚠️ Common exam mistakes

Treating all competitive pressures as equally important — KSFs require identifying and prioritizing what truly drives success in THAT specific industry.
Assuming KSFs are static — they shift with technology, customer preferences, regulatory changes, and competitive dynamics.
Confusing competitive intelligence with industrial espionage — legitimate competitive intelligence uses public sources (reports, reviews, social media, industry data).
Listing too many KSFs — in practice, only 3–4 exist at any one time, and focusing on too many dilutes strategic effort.

Reference:

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Competitive Strategy, Competitive Landscape Analysis, and Key Success Factors (KSFs)

Worked example

⚠️ Common exam mistakes