Problems in competitor identification in strategic analysis

Analyzing the members of a strategic group provides important information on which to base strategic decisions. However, there are risks in the process of identifying the organization's competitors and several mistakes should be avoided:

such as,

> Overemphasizing large visible competitors and neglecting smaller competitors.

> Focusing on established competitors, while ignoring potential new entrants.

> Ignoring international competitors who may enter the market and focusing on existing domestic competitors.

Competitive analysis has allowed an organization to establish its relative position against its competitors on several important criteria. However, an organization must judge itself and its competitors against the market in which it operates. At this stage of external analysis it is useful to establish a range of information about the market.