MKTG5001 Chap.4 The Marketing Environment & Competitor Analysis
The Marketing Environment & Competitor Analysis
The Marketing Environment & Competitor Analysis splits the world a firm faces into the micro-environment (company-specific actors — company, suppliers, intermediaries, customers, competitors, publics) and the macro-environment (industry-wide forces captured by PESTLE: Political, Economic, Social, Technological, Legal, Environmental).
Competitor analysis starts from what customers really want, identifies direct and indirect rivals, and builds a value-comparison table so you can position your strengths against competitor weaknesses.
What this chapter covers
- 01
Micro-environment: company, suppliers, intermediaries, customers, competitors, publics
- 02
Macro-environment: PEST / PESTLE forces (versions of the same idea)
- 03
Direct competitors (similar products) vs indirect competitors (same need / same dollars)
- 04
Start competitor analysis from 'what do consumers really want?'
- 05
Building a value-comparison table from rivals' claims and reviews
- 06
Positioning your strengths against competitors' weaknesses
Separate micro from macro and find indirect competitors
- 1 mark(a) Classify the landlord raising rent: this is a specific actor the cinema deals with directly — a supplier of premises (an input the firm needs), so it is the micro-environment.
- 1 markClassify rising electricity prices: a broad economic force affecting the whole industry, so it is the macro-environment (the Economic factor in PESTLE).
- 1 markClassify the streaming price cut: a rival's action affecting this firm specifically — a competitor in the micro-environment (and the streaming trend itself is a Technological macro force).
- 1 mark(b) Direct competitors = other cinemas showing similar films (same product). Identify them first because they are obvious rivals for the same offering.
- 2 marksIndirect competitors = anything competing for the same need (an evening out) or the same dollars: streaming services, bowling alleys, restaurants. These are easy to miss but often the real threat — here, streaming.
Key terms
- Micro-environment
- The company-specific actors close to the firm: the company itself, suppliers, intermediaries, customers, competitors and publics. They can be influenced, unlike macro forces.
- Macro-environment (PESTLE)
- The broad industry-wide forces nobody controls: Political, Economic, Social, Technological, Legal and Environmental. PEST and PESTLE are versions of the same idea.
- Direct vs indirect competitors
- Direct competitors sell a similar product to the same customers; indirect competitors meet the same core need or compete for the same dollars with a different product (e.g. streaming vs cinema).
- Value-comparison table
- A competitor-analysis tool listing each rival's claims and customer reviews, compared on each value dimension, so the firm can position its strengths against rivals' weaknesses.
The Marketing Environment & Competitor Analysis FAQ
What's the difference between the micro and macro environment?
The micro-environment is the company-specific actors close to the firm (suppliers, intermediaries, customers, competitors, publics) which it can influence. The macro-environment is the broad PESTLE forces (Political, Economic, Social, Technological, Legal, Environmental) that affect the whole industry and cannot be controlled.
Why bother identifying indirect competitors?
Because they are often the real threat. Indirect competitors meet the same customer need or chase the same dollars with a different product — a cinema's biggest rival may be streaming, not another cinema. Competitor analysis starts from what customers really want, which surfaces these substitutes.
Exam move
Drill the micro/macro sort and the PESTLE acronym, then practise listing indirect as well as direct competitors for any business. Build a quick value-comparison table so you can position strengths against a rival's weaknesses on cue.
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