Editing Competitor analysis (section)

==Competitive profiling==
The strategic rationale of competitor profiling is simple. Superior knowledge of rivals offers a legitimate source of competitive advantage. The raw material of competitive advantage consists of offering superior customer value in the firm's chosen market. The definitive characteristic of customer value is the adjective, superior. Customer value is defined relative to rival offerings making competitor knowledge an intrinsic component of corporate strategy. Profiling facilitates this strategic objective in three important ways.<ref>{{cite web | url=http://hbswk.hbs.edu/item/6737.html | title=The Most Common Strategy Mistakes | publisher=Harvard Business School | access-date=25 January 2014 | author=Joan Magretta| date=21 December 2011 }}</ref> First, profiling can reveal strategic weaknesses in rivals that the firm may exploit. Second, the proactive stance of competitor profiling will allow the firm to anticipate the strategic response of their rivals to the firm's planned strategies, the strategies of other competing firms, and changes in the environment. Third, this proactive knowledge will give the firms strategic agility. Offensive strategy can be implemented more quickly in order to exploit opportunities and capitalize on strengths. Similarly, defensive strategy can be employed more deftly in order to counter the threat of rival firms from exploiting the firm's own weaknesses.<ref name="Fleisher & Bensoussan, 2007"/>

Firms practising systematic and advanced competitor profiling may have a significant advantage. A comprehensive profiling capability is a core competence required for successful competition.<ref name="Fleisher & Bensoussan, 2007"/>

A common technique is to create detailed profiles on each of the major competitors.<ref>{{cite book | url=https://books.google.com/books?id=TgmLvRjLtlwC&q=Competitor+profiling++detailed+profiles+on+each+of+your+major+competitors&pg=PA49 | title=Strategic Planning for Distributors: Execution Isn't Everything--It's the Only Thing! | publisher=Natl Assn Wholesale-Distr | author=Thomas O'Connor | year=2010 | pages=49 | isbn=978-1934014226}}</ref> These profiles give an in-depth description of the competitor's background, finances, products, markets, facilities, personnel, and strategies. This involves:

* Background
** location of offices, plants, and online presences
** history – key personalities, dates, events, and trends
** ownership, corporate governance, and organizational structure
* Financials
** P-E ratios, [[dividend policy]], and profitability
** various financial ratios, liquidity, and cash flow
** profit growth profile; method of growth (organic or acquisitive)
* Products
** products offered, depth and breadth of [[product line]], and product portfolio balance
** new products developed, new product success rate, and R&D strengths
** brands, the strength of brand portfolio, brand loyalty and brand awareness
** patents and licenses
** quality control conformance
** [[reverse engineering]] or [[deformulation]]
* Marketing
** segments served, market shares, customer base, growth rate, and customer loyalty
** promotional mix, promotional budgets, advertising themes, ad agency used, sales force success rate, online promotional strategy
** distribution channels used (direct & indirect), exclusivity agreements, alliances, and geographical coverage
** pricing, discounts, and allowances
* Facilities
** plant capacity, capacity utilization rate, age of plant, plant efficiency, capital investment
** location, shipping logistics, and product mix by plant
* Personnel
** number of employees, key employees, and skill sets
** strength of management, and management style
** compensation, benefits, and employee morale & retention rates
* Corporate and marketing strategies
** objectives, mission statement, growth plans, acquisitions, and divestitures
** [[marketing strategies]]