Methods of Business Valuation

In: Business and Management

Submitted By bnielsen3
Words 1199
Pages 5
Companies should focus on their own strategy, resources and opportunities, it is important to recognize that other companies will often be carrying out similar analyses, and trying to exploit the same opportunities. As such, any business strategy needs to consider what the firm’s competitors are doing and how this will impact. With more than one team, the actions of competitors will play a vital role in successful strategic planning.
Using the available information in an attempt to predict and pre-empt the future strategies and behavior of other teams in 1st and 2nd place. A company needs to determine its competitors’ current and likely future strategies and actions, and how these competitors may respond to the actions of the firm itself. The firm can also consider how it could try to influence the behavior of its competitors and potential competitors to its competitive advantage, perhaps by price or investment.

Competitor Analysis Framework
Michael Porter developed a framework through which companies can analyze their competitors based on what Porter believed were the four key aspects driving a business. These aspects are the objectives of the business; the assumptions made by the business; the strategy of the business and the capabilities and resources of the business. Of these, the objectives are the factors that determine what the business is aiming for, the strategy and capabilities determine how it will try to get there, and the assumptions drive how the competitor may react to both foreseen and unforeseen events. In order to be useful, a competitor analysis should focus on the most important existing competitors and on any potential competitors which may enter the market or move into the market segments where the company carrying out the analysis is operating.

Competitor’s Objectives
It is important to understand what objectives a competitor has,…...

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