Competitor Analysis in Strategic Management: Is it a Worthwhile Managerial Practice in Contemporary Times?

Abstract

Studying the actions and behavior of close competitors is essential. Unless a company pays attention to what competitors are doing, it ends up ‘flying blind’ into battle. Managers need competitive information to understand the industry and its competitors; to identify areas in which the competitors are weak and to evaluate the impact of strategic actions on competitors. The purpose of this study is to establish the relevance or otherwise of competitor analysis as a strategic management practice in modern business competition. An integrative literature review approach was adopted for the study. This involved reviews, critiques, and synthesis of representative literature on the topic in an integrated way for generating new perspectives on competitor analysis. Personal interpretations of the issues addressed were the bases upon which the authors drew their conclusions. The study revealed that identifying competitors and how they operate helps managers to tackle industry issues that are detrimental to their companies’ health and also helps managers to learn from competitors. It also revealed that firms that pay attention to competitors’ actions have been found to achieve better business performance.

Keywords: strategic management, managerial practice, competitor analysis, competition