Your study group has been charged with conducting an assessment of competitive behavior in the sporting apparel industry. What are likely to be the key elements of your analysis?

Question

What will be an ideal response?

Answer 1

Gathering competitive intelligence about the strategic direction and likely moves of key competitors allows a company to prepare defensive countermoves, to craft its own strategic moves with some confidence about what market maneuvers to expect from rivals in response, and to exploit any openings that arise from competitors' missteps. Based on a framework from Michael Porter, in order to succeed in predicting a competitor's next moves, company strategists need to assess:

• Strategy: Analysts need to begin with a good understanding of each rival's-in this instance, Nike, Under Armour, lululemon, Adidas-Reebok, Fila, etc.-current strategy, as an indicator of its pattern of behavior and best strategic options. 
• Objectives: An appraisal of a rival's objectives should include not only its financial performance objectives but strategic ones as well (such as those concerning market share). What is even more important is to consider the extent to which the rival is meeting these objectives and whether it is under pressure to improve. 
• Resources and Capabilities: A rival's strategic moves and countermoves are both enabled and constrained by the set of resources and capabilities the rival has at hand. Thus a rival's resources and capabilities (and efforts to acquire new resources and capabilities) serve as a strong signal of future strategic actions (and reactions to your company's moves) 
• Assumptions: How a rival's top managers think about their strategic situation can have a big impact on how the rival behaves. Banks that believe they are too big to fail, for example, may take on more risk than is financially prudent. Assessing a rival's assumptions entails considering its assumptions about itself as well as about the industry it participates in. 

The question is where to look for such information, since rivals rarely reveal their strategic intentions openly. Information regarding these four analytic components can often be gleaned from company press releases, information posted on the company's website (especially the presentations management has recently made to securities analysts), and such public documents as annual reports and 10-K filings for those sporting apparel companies that are publicly-traded).