4

Intra-Industry Analysis
Fly a MIG-29 at Mach 2.3. MIGS etc, in conjunction with the Russian
aerospace industry, has a limited number of high-performance military
flight packages available for immediate booking. You need not be a pilot.
Flight packages from $7,000. 1-800-MIGS ETC
-extract of advertisement, Washington Post, February 6, 1994, p. Al2

OUTLINE
INTRODUCTION AND OBJECTIVES
SEGMENTATION ANALYSIS

The Uses of Segmentation

Stages in Segmentation Analysis

STRATEGIC GROUPS
COMPETITOR ANALYSIS

Competitor Intelligence

A Framework for Predicting Competitor Behavior

Applying the Results of Competitor Analysis

SUMMARY

.!j INTRODUCTION AND OBJECTIVES

If industries are defined by competitive relationships among firms, they are inter
nally heterogeneous and their boundaries ill-defined. A firm's competitive relation
ships are differentiated by the distance of the relationship and the market context.
American Airlines' closest competitors are United Airlines and Delta, whereas more
distant competitors are Amtrak and Greyhound bus lines. Between New York and
Milan, American's closest competitor is Alitalia, but between New York and Mont
real it is Air Canada. None of these airlines competes with MIGS etc, which offers
air transport services in a unique market segment. Standard industry classifications
tend to be based on similarities of customer demand, technology, and raw materials.
As a result, conventional industry definitions seldom correspond closely to groups of
competing firms. The United States retailing sector includes JC Penney, Safeway
Food Stores, Tiffany's, Shell gas stations, and Blockbuster Video. Each of these
retailers inhabits a different competitive environment and none competes directly
with another.
Such heterogeneity poses problems for industry analysis. In the last chapter, we
viewed the industry as a real-wo.rld phenomenon with definite structural features that

85

lNTRA-l;-lDUSTRY ANALYtilS

determined competition and profitability. However, if the industry itself is an artificial

construct, industry analysis may be misleading. For example, industry analysis tells us
that the microcomputer industry is fragmented, with low entry barriers, low brand loy
alty, highly price-sensitive customers, and strong supplier power exercised by Intel. This
should result in fierce competition and slim margins. Yet, while gross margins on pes
averaged a modest 15 to 25 percent in 1994-1995, PC servers (more powerful micro
computers that distribute programs and data around a network of PCs) averaged a 30
to 40 percent gross margin. For Compaq Computer, servers accounted for only 5 per
cent of sales, but 25 to 30 percent of profits during 1994.1 A similar phenomenon
occurs in the bread and beer industries. Although both are intensely competitive indus
tries dominated by large companies that benefit from scale economies in production,
distribution, and advertising, small companies in the form of mini-bakeries and micro
breweries have been successful supplying premium-priced, specialty products to local
markets.
For some companies, the central feature of their competitive environment is not
the industry, but the behavior of a single competitor. Thus, Pepsi-Colas competitive
environment is dominated by the strategy and marketing tactics of Coca-Cola. For
Airbus Industrie, strategic decisions are dominated by its predictions of Boeing's com
petitive initiatives.
To understand competition more intimately and to identify profit opportunities
more precisely, a more detailed look into industries is needed. This chapter explores,
at a finer level of analysis, the internal structure of industries.
By the time you have completed this chapter, you will be able to:
Segment an industry into its constituent markets and identify the relative
attractiveness of the different segments and the differences in key success
factors among them.

FIG

Classify the firms within an industry into strategic groups based on similari
ties in their strategies.

The

Predict the behavior of individual companies including the competitive

moves that they are likely to initiate, and the responses they are likely to
evoke from rivals.

Custol
prod~
istics '

~I SEGMENTATION ANALYSIS 2
Industries tend to be defined broadly: the automobile industry, the computer soft
ware industry, the electric power industry. To analyze competition at a more fine
grained level, we need to define the markets within which firms meet at a more dis
aggregated level in terms of products and geography.

The Uses of Segmentation

If the nature and intensity of competition varies among the different submarkets
that an industry serves, then it is useful to partition an industry into segments and
analyze their separate structural characteristics. Such analysis is useful not only for
the new entrant in determining the most attractive part of a market to enter, but also
for established firms deciding in which segments to maintain a presence and how to
allocate resources among them. Although the European refining industry earned
dismal rates of profit from 1995 to 19<t7, attractive margins existed in selected sub-

Seg

~DUSTRY ANALYSIS

SEGMI3~TATION ANALYSIS

y itself is an artificial

markets: notably in diesel fuel and aviation fuel, bitumen in Poland and Hungary;
and lubricants in Western Europe.
Differences in customers and competition between segments may also mean
differences in key success factors between segments. In the United States beer
industry, competing effectively in the market for standard, packaged beer requires
cost-efficient operation in the form oflarge-scale, automated production, regional or
national distribution through a vast network of local franchised distributors, and
heavy investment in advertising and promotion. However, in the market for spe
cialty beers, success is far more dependent on a carefully crafted, quality, flavorful
product; local mystique; and localized distribution that emphasizes freshness and
careful handling.

ustry analysis tells us

lITiers, low brand loy
[ercised by Intel. This
;ross margins on PCs
!lore powerful micro
fPes} averaged a 30
unted for only 5 per
similar phenomenon
ly competitive indus
omies in production,
I-bakeries and micro
uty products to local

Stages in Segtnentation Analysis

Segmentation analysis proceeds in five principal stages; Exhibit 4.1 summarizes
these stages and applies them to the European metal container industry.

e environment is not
si-Cola's competitive
:s of Coca-Cola. For
ons of Boeing's com

1. Identify Key Segmentation variables. The first stage of segmentation

analysis is to determine the basis of segmentation. Segment decisions are essentially
choices about products and customers, hence segmentation variables relate to the
characteristics of the product or characteristics of customers. Figure 4.1 lists a number
of segmentation variables. The most appropriate segmentation variables are those that

. profit opportunities
his chapter explores,

,Ie to:
identifY the relative
in key success

~nces

,s based on similari

:ng the competitive

es they are likely to

I
I,

the computer softat a more fine

~eet at a more dis

'~on

erent submarkets
into segments and
seful not only for
t to enter, but also
sence and how to
industry earned
d in selected sub-

87

FIGURE 4.1
The Basis for
Segmentation:
Customer and
Product Character
istics

88

INTRA-INDUSTRY ANALYSIS

ain Stages of Segmentation Analysis as Applied to the European Metal Can Industry
1. Identify Key Segmentation VariabJesand Categories

Identify segmentation variables.

(Raw material, can design. can size. customer

size. customer's industry, location).

Reduce the number of se.gmentationvariables

by selecting the most significant segmentation
variables and by combining closely correlated
segmentation variables.

(Type of can, customer's industry. locatioll);

Identify discrete categories for each segmenta

tion variable.

(Type of can: steel 3piece, steel 2-piece, alumi

num 2.piece,genetal cans, composite cans,
aerosols. Type of customer: food processing.
fruit juke, pet food, soft drink, beer; oil. boca
tion: France, Germany, Spain/Portugat Italy,UK,
BeneluxlNith).

2. Construct a Segmentation MatriX

Food

Fruit

juice

r--

Steel 3-pie<:e

Pet
food

Soft

Beer

Oil

France

drink

Germany
~

. __ spain/Portugal
~
Italy

r-------t---~--i---~---r__-_____j~

e--f--

Steel 2pie<:e
Aluminum 2-piece
-

General cans
Composite cans

Aerosol cans

e-

3.AnaJyzeSegmentAttractwene~

Apply Five Forces analysis to ihdividUidsegments.

E.g. Aluminum 2-piece cans to soft drink canners in Italy:
Supplier Power
strong labor union
competitive aluminum supply

Barriers to mobility
heavy cost of
aluminum
can lines

Internal rivalry
few companies
I-_~' low differentation

little excess capacity

Substitutes
other types of can not viable
I-_~ plastic not attractive in small
sizes
I glass heavy

Buyer power
dominant influence of a
few soft drink cannerl
bottlers

4. Identify Key Success Faetprs, inE~cJ] Segment

Within each segment, how do customers choose,al"\d what is needed to survive competition1
5. Analyze Attractions of Broad versus Narrow Segment Scope

What is potential to share <o~.ts ~nd trahs1erskills atross segments?

How similar are Key Succe.ss Factors bet'Ne~n segme~.ts1
Are there benefits 61 segmentspeCialization?

IJDUSTRY ANALYSIS

89

SEGMENTATION ANALYSIS

partItIon the market most distinctly in terms of substitutability among customers

(demand-side substitutability) and producers (supply-side substitutability). Market
segments are generally associated with price differentials. Indeed, price itself may pro
vide a useful basis for segmenting a market. A classic example of price-based segmen
tation is that of General Motors during the 1920s. In contrast to Henry Ford's single
model strategy, Alfred Sloan identified six market segments ranging from the lowest
price category, $450-$600, to the highest, $2500-$3500. Each of GM's divisions tar
geted a separate price segment with Chevrolet at the bottom, and Cadillac at the top. 3
Typically there are many customer and product characteristics that can be used
as a basis for segmentation. In order for a segmentation analysis to be manageable,
we need to reduce these to two or three. To reduce the number of segmentation vari
ables, do the following:
.
IdentifY the most strategically significant segmentation variables. In terms of
substitutability by customers and by producers, which variables are most
important in creating meaningful divisions in a market? In the case of metal
containers, geography is critical (cans are expensive to transport long dis
tances), material (influences both demand-side and supply-side substitut
ability), and customer type.
Combine segmentation variables that are closely correlated. In the case of res
taurants, possible segmentation variables such as price level, service (waiter ser
vice/self-service), cuisine (fast-food/full meals), and alcohol license (wine
served/soft drinks only) could be combined into a single variable, restaurant
type, with three categories: full-service restaurants, cafes, and fast-food outlets.

2. Construct a Segmentation Matrix.

Once the segmentation variables have

been selected and discrete categories determined for each, the individual segments
may be identified using a two- or three'-dimensional matrix. Thus, the European
metal container industry might be analyzed in a three-dimensional segmentation
matrix (see Exhibit 4.1), whereas the world automobile industry might be seg
mented simply by vehicle type and geographical region (see Exhibit 4.2).

3. Analyze Segment Attractiveness.

Profitability within an industry seg

ment is determined by the same structural forces that determine profitability within
an industry as a whole. As a result, Porter's Five Forces of Competition framework is
equally effective in relation to a segment as to an entire industry. Exhibit 4.2 applies
Five Forces analysis to certain segments of the world automobile industry.
There are, however, a few differences. First, when analyzing the pressure of
competition from substitute products, we are concerned not only with substitutes
from other industries, but more importantly, substitutes from other segments within
the same industry. For example, in deciding whether to introduce a station wagon
version of its Mondeo/Contour sedan, Ford's analysis of the station wagon market
must consider substitute competition from passenger minivans.
Second, when considering entry into the segment, the major source of entrants is
likely to be producers established in other segments within the same industry. Thus,
the threat of entry into a segment depends on whether there are barriers that restrict
the entry of firms from other segments. These are termed barriers to mobility to dis
tinguish them from the barriers-to entry that offer protection from outside the indus
try. Barriers to mobility are key factors in determining the ability of a segment to
offer superior returns to those available elsewhere in the industry. Unless there are

90

INTRA-INDUSTRY ANALYSIS

EXHIBIT 4.2

Segmenting the World Automobile Market

A global automobile producer such as Ford or Toyota might segment the world auto market by prod.
uct type and geography. A first-cut segmentation might be along these lines:
REGIONS
N.America W. Europe

P
R

D
U
C

Luxury cars
Full-size sedans
Mid-size sedans
Small-size sedans
Station wagons
Passenger minivans
Sports cars
Sport-utility
Pickup trucks

E. Europe

Asia

Latin
America

AU$'lralasia

Africa

- - --

--

- ~

-~-~-~------ -~

One of the most useful applications of such a segmentation would be an understanding of how profit
ability in the past had varied between segments and the determinants of such differentials. For exam.,.
pie, during the 1990s:
The North America market for smallsized sedans has always yielded low profits due to the large num
ber of competitors (all the world's major auto producers including a number of low<ost producers
such as HyundaO, comparatively low product differentiation (as indicated by the convergence of car
designs, automotive technologies, and quality levels), and high level of capacity relative to demand.
The North America/European markets for passenger minivans have been highly profitable segments due
to strong demand relative to capacity and comparatively few participants. Chrysler's survival during the
19805 was primarily du:e to its strong position within this segment (with its Dodge Caravan and Plymouth
Voyager). The influx of companies into minivans was eroding their margins during the late 19905.
Worldwide, the market for luxury cars was highly unattractive for most of the 1990s. Despite this tra
ditionally being a high margin segment due to high product differentiation and price insensitivity of
buyers, Rolls Royce, Mercedes, Jaguar, and BMW were, as a group, barely profitable. ThesmaH size
of the segment made it difficult to spread the fixed costs of new model development. I.ow demand
due to recession in Europe and a luxury tax in the United States resulted in an overhang of excess
capacity. New entry by Honda (Acura), Toyota (Lexus), and Nissan (Infiniti), together with the acquisi
tion of Jaguar by Ford, had greatly increased competition. Meanwhile, enhancement in the quality
and features of mass-produced family sedan made these cars closer substitutes for luxury cars.
Once we understand the factors that determined segment profitability in the past, then we can predict
segment profitability in the future.

significant barriers to the mobility of firms from other segments, a segment will be
unable to maintain superior profitability to that of the industry.4 In most industries,
the increased flexibility of design and production made possible by computer-aided
design and flexible manufacturing systems has had the effect of reducing barriers to
mobility. In the automobile industry, high margin segments such as luxury cars, pas
senger vans, and sport utility vehicles have seen a sharp rise in competition as volume
car manufacturers have entered them.
Segmentation analysis can -also be useful in identifYing unexploited opportuni
ties in an industry. For example, a segmentation matrix of the restaurant industry in

DUSTRY ANALYSIS

market by prod-

15I/l

AfrIca

~~ _l

==J

SEGMENTATION ANALYSIS

a town or locality might reveal a number of empty segments. The interesting ques
tion is whether such empty segments represent unexploited opportunities or
whether they reflect a lack of customer demand. Consider the market for kitchen
appliances. In the early 1960s, microwave ovens and dishwashers were manufactured
almost exclusively for the catering trade. A segmentation analysis of the appliance
industry might have alerted the firms established in these segments to opportunities
for developing these products for the consumer market.

4. Identify the Segment's Key Success Factors.

Differences in competi
tive structure and in customer preferences between segIT1ents imply differences in
the basis of competitive advantage. Using the same analysis of buyers' purchase cri
teria and the basis on that firms compete that was outlined in Chapter 3 (see Figure
3.6), we can identify Key Success Factors for individual segments.
For example, the United States bicycle industry can be segmented on the basis of
the age-group of the customer (infants, children, youths, adults), price, branding, and
distribution channel. Combining and categorizing these segmentation variables results
in four major segments each with different Key Success Factors (see Figure 4.2).

of how profit.
Is. For exam
FIGURE 4.2
Segmentation and Key Success Factors in the u.S. Bicycle Industry

segment will be
most industries,
computer-aided
cing barriers to
uxury cars, pas
tition as volume

91

92

INTRA-INDUSTRY ANALYSIS

5. Select Segment Scope.

A final issue relating to the choice ofwhich segments

to enter concerns the relative advantages of segment specialization versus segment
diversity. The advantages of a broad over a narrow segment focus depend on two major
factors: similarity of key success factors and the presence of shared costs. In an industry
where key success factors are similar across segments, a firm can adopt a similar strate
gic approach in relation to different segments. If different strategies need to be adopted
for different segments, not only does this pose organizational difficulties for the firm,
but also the credibility of the firm in one segment may be adversely affected by its strat
egy in another. Harley-Davidson's introduction of a range of lightweight motorcycles
during the early 1970s was a failure, not only because Harley-Davidson could not com
pete with the Japanese in this segment, but also because of the damage to the firm's rep
utation in the heavyweight motorcycle segment. Mercedes-Benz seems to be suffering
a similar fate with its A-class compact car.
Shared costs mean that broad-segment suppliers can achieve lower costs than
their narrow-segment competitors. The vulnerability of narrow-segment specialists
to competition from broad-line competitors is constantly being revealed.
In soft drinks, 7 Up's reliance on a single lemon-lime drink made it vulnera
ble to competition from broad-line competitors such as Coca-Cola and
Pepsi. Ultimately, 7 Up, together with Dr. Pepper, was acquired by Cadbury
Schweppes.
The acquisition of specialist auto producers Saab, Lancia, Jaguar, AMC
Jeep, Maserati, Audi, Alfa-Romeo, and Lotus by broad-segment car makers
was a result of the inability of these specialists to spread their development
costs over a large enough sales volume.
The relative merits of focused and broad-segment strategies vary among indus
tries. The critical issue concerns the benefits of specialization versus the benefits of
sharing joint costs. In service industries, William Davidow and Bro Uttal have
argued that economies from specialization and differences in key success factors in
different customer segments favor a narrow segment focus. By specializing in hernia
surgery, Shouldice Hospital near Toronto achieves remarkable levels of productivity
and quality.S In audio equipment, specialists have continued to dominate the high
quality segment against the major consumer electronics companies such as Sony,
Matsushita, and Philips.
The issues of specialization versus spreading common costs over multiple
markets are similar to diversification decisions. We return to this discussion in
Chapter 14.

_I

STRATEGIC GROUPS
Whereas segmentation analysis concentrates on the characteristics of markets as the
basis for disaggregating industries, strategic group analysis uses the characteristics
of firms as the basis for division. A strategic group is "the group of firms in an
industry following the same or a similar strategy along the strategic dimensions."6
Strategic dimensions include those decision variables that best distinguish the busi
ness strategies and competitive positioning of the firms within an industry. These
may include product market scope (in terms of product range and geographical
breadth), choice of distribution channels, level of product quality, degree of vertical
integration, choice of technology, and so on. By selecting the most important strate
gic dimensions and locating each firm in the industry along them, it is usually possi

NDUSTRY ANALYSIS

93

STRATEGIC GROUPS

ce ofwhich segments
Irion versus segment
iepend on two major
costs. In an industry
dopt a similar strate
s need to be adopted
iculries for the firm
,affected by its strat ~
tweight motorcycles
:ison could not com
age to the firm's rep
eems to be suffering

ve lower costs than

segment specialists
evealed.

lk made it vulnera
as Coca-Cola and
(uired by Cadbury
~a, Jaguar, }U\1C

gment car makers

eir development
among indus
us the benefits of
Bro Uttal have
success factors in
.a1izing in hernia
Is of productivity
minate the high
es such as Sony,

f markets as the
characteristics
of firms in an
dimensions."6
guish the busi
industry. These
d geographical
gree of vertical
portant strate
s usually possi-

FIGURE 4.3
Strategic Groups in the World Automobile Industry

ble to identify one or more groups of companies that have adopted more or less
similar approaches to competing within the industry. Figure 4.3 identifies strategic
groups within the world automobile industry, and Figure 4.4 identifies strategic
groups within the oil industry. 7
Strategic groups were developed as a result of empirical analysis of the domestic
appliance 8 and brewing industries. 9 Most of the empirical research into strategic
groups has been concerned with analyzing differences in profitability among firms. 10
The basic argument is that mobility barriers between strategic groups permit some
groups of firms to be persistently more profitable than other groups. In general, the
proposition that profitability differences within strategic groups are less than differ
ences between strategic groups, has not received robust empirical support. l l The
inconsistency of empirical findings may reflect the fact that the members of a strate
gic group, though pursuing similar strategies, are not necessarily in competition with
one another. For example, within the world oil industry, the nationally based inte
grated oil companies such as Petrobras (Brazil), Indian Oil, Mitsubishi Oil (Japan),
and Petronas (Indonesia), are not competing directly with one another, although they
are located within the same strategic group. Results from the U.S. airline industry
suggest that, though strategic group analysis may not tell us much about profitability
differences, it can be useful in helping us understand the types of competitive
responses by different firms within an industry.12
For our purposes, strategic group analysis is more valuable as a descriptive than
a predictive tool. Because strategic group analysis focuses on strategic similarities

94

INTRA-INDUSTRY ANALYSIS

FIGURE 4.4
Strategic Groups
Within the World
Petroleum Industry

rather than competitive relationships, its potential for explaining inter-firm profit
ability differences is limited. However, as a means of gaining a broad picture of the
types of firms within an industry, the kinds of strategies that have proven viable, and
how different firms are positioned in relation to one another, strategic group analysis
can contribute substantially to the understanding of industry structure, firm strategy,
and industry evolution. This view of strategic groups as a valuable descriptive device
is supported by Reger and Huff's evidence that managers within an industry have
consistent perceptions of groupings of similar firms. 13

~ COMPETITOR ANALYSIS
The purpose of competitor analysis is to predict the behavior of one's closest rivals.
The importance of competitor analysis to a company depends on the structure of its
industry. In a fragmented industry where firms produce an undifferentiated product,
as in the case of most agricultural commodities, market competition is the outcome
of the strategies and decisions of so many producers that there is little point in ana
lyzing the behavior of individual firms. In highly concentrated industries, the com
petitive environment of a company depends critically on the behavior of a few rivals.
In household detergents, the industry environment is dominated by the competitive
interaction of Procter & Gamble, Colgate-Palmolive, and Lever Brothers (Uni
lever). The same can be said ab~ut large passenger jet aircraft (Boeing and Airbus
Industrie), jet engines (GE, Pratt & Whitney, Rolls-Royce), soft drinks (Coke and

---------

.------

IUSTRY ANALYSIS

95

COMPETITOR ANALYSIS

Pepsi), news weeklies (Time, Newsweek, and US. News & World Report), and the
retail market for office supplies (Office Depot, Staples, and Office Max). Similar
circumstances exist in more local markets. For the owner of the Shell gas station in
the English village of Coalpit Heath, the dominant feature of the local gasoline
market is the competitive behavior of the Texaco station across the road.
Even in markets that are not dominated by two or three competitors, the extent
of differentiation in the goods and services offered by different firms may mean that
a company faces just one or two close competitors whose strategies substantially
impact its profitability.
In the UK newspaper industry, ten national daily newspapers and a number
of regional and local papers compete fiercely. Yet, for The Independent, the
competitive environment is determined primarily by The Times and the Daily
Telegraph. Among the tabloids The Sun, Daily Mirror, and Star form another
intensely competitive group.
In the U.S. automobile market, more than 20 manufacturers vie for market
share. However, Jaguar's competitive environment is most strongly influ
enced by the product, pricing, and promotional policies of Mercedes-Benz
and BMW.

inter-firm profit
Dad picture of the
roven viable, and
ic group analysis
re, firm strategy,
escriptive device
an industry have

e's closest rivals.

e structure of its
ntiated product,
is the outcome
e point in ana
tries, the com
ofa few rivals.
he competitive
rothers (Uni
.ng and Airbus
nks (Coke and

It is not only through marketing activities that firms' competitive strategies are
interdependent. In industries where plant capacity is large relative to the total mar
ket, investment decisions are highly interdependent. 14 In petrochemicals, any single
firm's calculation of the returns on investment in a new plant must take careful
account of other firms' investment plans. Research and development activities show
similar interactions. In pharmaceuticals, the returns to research and development
depend crucially on being the first company to file for a patent on a new drug. R&D
investments require a careful appraisal 'of whether other firms are pursuing similar
avenues of research and, if so, their stage of development.
It is in the analysis of these intensive interactions between small numbers of
competitors that applications of game theory described in the previous chapter
have proven to be especially useful. The value of game theory is that it provides a
structured approach to identifYing the choices available to the different players,
specifYing the payoffs, and showing how the game can be changed to alter the pay
offs. The central weakness is that formal game theory models cannot be applied to
complex business situations. The approach to competitor analysis followed here is
less theoretical but more practical. It focuses on two issues: acquiring information
about competitors and predicting their behavior.

Cotnpetitor Intelligence
Competitor analysis has three major purposes:
To forecast competitors' future strategies and decisions
To predict competitors' likely reactions to a firm's strategic initiatives
To determine how competitors' behavior can be influenced to make it more
favorable
For all three purposes, the key requirement is to understand competitors in order
to predict their choices of strategy and tactics and their reactions to environmental
changes and our own competitive moves. To understand competitors, it is imponant to

96

INTRA-INDUSTRY ANALYSIS

be informed about them. One of the fastest growing areas of corporate activity in recent
years has been competitor intelligence. About one-tenth oflarge U.S. corporations are
estimated to have competitor intelligence units, a proportion that has tripled since
1988. Competitor intelligence involves the systematic collection and analysis of pub
lic information about rivals for informing decision making. Business rteek notes that
Anne Selgas, Eastman Kodak's director of competitive intelligence:
... regularly reads an extensive list of publications that even she considers a
tad bizarre. Her favorite is the Transylvania Times, a semi-weekly out of
tiny Brevard in North Carolina's Transylvania County. A medical film
rival-Sterling Diagnostic Imaging Inc.-has a plant there, and Selgas says
the paper has lots of hiring and layoff news that heips her understand
what's going on. 15
Historically, European and Asian companies have given greater attention to com
petitor intelligence than U.S. companies. However, increased competitive pressures
and greater need for fast responses have caused many firms to focus greater attention
on their competitors. Discount broker Charles Schwab created its competitor intel
ligence program in 1994, tracking both traditional and new competitors by paying
consultants to visit rivals' offices, hiring competing firms' employees, and quizzing
customers. The distinction between public and private information is not always
clear-the application of trade secrets law to the information carried by an employee
moving between firms is especially murky. As a result, competitor intelligence
always runs the risk of degenerating into industrial espionage. General Motors' case
against Volkswagen over the alleged theft of confidential information by Mr. Lopez
and his colleagues is the most publicized recent example. In June 1996, Boehringer
Mannheim Corp. sued Johnson &Johnson's Lifescan Inc. for obtaining confidential
information relating to its AccuEasy blood-monitoring device through eavesdrop
ping on a sales meeting.

A Fram.eworl~ for Predicting Com.petitor Behavior

Competitor intelligence is not simply about information. The problem is likely to be
too much rather than too little information. The key is a systematic approach that
makes clear what information is required and for what purposes it will be used. Our
objective is to understand our competitor. A characteristic of great generals from
Hannibal to Patton has been their ability to go beyond military intelligence and to
"get inside the heads" of their opposing commanders. Figure 4.5 shows a basic
framework for competitor analysis. There are four main inputs into the analysis.

1. Identifying Current Strategy.

The starting point is identifying the com
petitor's current strategy. In the absence of any forces for change, a reasonable
assumption is that the company will continue to compete in the future in much the
same way as it competes at the present. A competitor's strategy may be identified on
the basis of what the firm says and what it does. These two are not necessarily the
same. As Mintzberg has pointed out, there may be a divergence between intended
strategy and realized strategy.16 Major sources of explicit statements of strategy
intentions can be found in the annual reports of companies, particularly in the
chairman's message to shareholders, and in other statements by senior managers,
especially in meetings with inveStment analysts. With regard to realized strategy,
emphasis must be given to the competitors' actions and decisions: what capital

',!DUSTRY ANALYSIS

Irate activity in recent

U.S. corporations are

hat has tripled since
and analysis of pub
iness Meek notes that
ce:

COMPETITOR ANALYSIS

97

FIGURE 4.5
A Framework for
Competitor Analysis

she considers a
I-weekly out of
~ medical film
and Selgas says
ler understand

: attention to com
rnpetitive pressures
us greater attention
ts competitor intel
lpetitors by paying
'Yees, and quizzing
ltion is not always
ied by an employee
~etitor intelligence
meral Motors' case
tion by Mr. Lopez
: 1996, Boehringer
lining confidential
uough eavesdrop-

~lem is likely to be
ltic approach that
iwill be used. Our
eat generals from
~telligence and to
1.5 shows a basic
the analysis.

ltifYing the com

1ge, a reasonable
lture in much the
rbe identified on
~t necessarily the
ietween intended
lents of strategy
Irticularly in the
!fnior managers,
lealized strategy;
6s: what capitai

investment projects are being undertaken, what hiring is taking place, what new
products are in the pipeline, what acquisitions or strategic alliances have recently
been undertaken or rumored, what new advertising and promotional campaigns
have been planned? Because of the importance of communicating both to employees
who implement the strategy and to the investment community who evaluates the
strategy and forecasts its implications for future performance, companies are becom
ing more explicit about their strategic plans. For example, British Petroleum's web
site includes not only the company's annual report to shareholders and 10K report,
but also its press releases and reports to analysts. Taken together, these include
explicit statements of corporate strategy and strategies for each of BP's businesses
(upstream, downstream, chemicals, and alternative energy), together with forecasts
of key operating and financial variables. Predictions about future strategies can also
be inferred from current decisions: Sears, Roebuck's announcement in 1993 of its
intention to sell its Dean Witter financial services subsidiary was seen as a signal
that Sears was refocusing on its core retailing businesses and would subsequently
devote resources and top management energies into revitalizing its competitive posi
tion within U.S. retailing. Similarly, AT&T's desire in 1997 to acquire the regional
Bell operator, SBC Communications, was widely viewed as an indicator that AT&T
had yet to abandon its old monopolistic ways and embrace aggressive cost and tech
nological competition, and customer-focused marketing in the new, global telecom
munications market.

2. Identifying the Competitor's Objectives. To forecast how a competitor

might change its strategy, some knowledge of its goals is crucial. Identifying basic

98

INTRA-INDUSTRY ANALYSIS

financial and market objectives is particularly important. A company driven by

short- and medium-term profitability such as Emerson Electric or GEC pIc is a
very different competitor than a company with long-term market share goals such as
Procter & Gamble or Komatsu. A company with a short-term ROI objective is
unlikely to react aggressively to the competitive initiative of a rival. Such a reaction
would be financially costly in the short term. The demise of the British motorcycle
industry and near-disappearance of the U.S. consumer electronics industry have
been attributed to the responses of domestic UK and U.S. companies to Japanese
competition by withdrawing from competition and retreating to market segments
where profits are more secure. 17 Compare the reaction of Procter & Gamble to com
petition. P&G's obsession with market share means that it is .meeting competition
willing to finance long-lasting competitive warfare using price cuts, promotions, and
advertising. In the case of new products, P&G is willing to accept losses for up to
nine years while building a market position.
If the competitor is a subsidiary of a larger corporation, it is important to com
prehend the goals of the parent, since these goals impact the strategy of the subsid
iary. The means by which the parent controls the subsidiary is also important. How
much autonomy does the subsidiary have? A subsidiary's ability to respond to com
petitive assaults may be restricted by corporate control mechanisms.
The level of current performance in relation to the competitor's objectives is
important in determining the likelihood of strategy change. The more a company is
satisfied with present performance, the more likely it is to continue with the present
strategy. If, on the other hand, the competitor's performance is falling well short of
target, then the likelihood of radical strategic change, possibly accompanied by a
change in top management, is increased.
Particular problems arise when a competitor is not subject to profitability disci
plines. Such competitors can initiate destructive price competition. During the early
1990s, the world aluminum industry was plagued by depressed prices resulting from
heavy sales by Russian producers onto world markets. Russian producers were not sub
ject to financial disciplines and were able to acquire energy at below world market prices.

3. Competitors' Assumptions about the Industry.

A competitor's strate
gic decisions are conditioned by its perceptions (of the outside world and of itself)
and by assumptions concerning the industry and about business in general. Both are
likely to reflect the theories and beliefs that senior managers hold about their indus
try and the determinants of success within it. Evidence suggests that, not only do
these systems of belief tend to be stable over time, they also tend to converge within
an industry. Hence, at any point of time, different firms tend to adhere to very simi
lar beliefs. These industry-wide beliefs about the determinants of success have been
described by J-C Spender as "industry-recipes."18
Industry-recipes may limit the ability of a firm, and indeed an entire industry, to
respond rationally and effectively to external change. The result may be that established
firms have a "blindspot" to competitive initiatives of a newcomer. During the 1960s,
the Big Three U.S. automobile manufacturers firmly believed that small cars were
unprofitable. This belief was based on their own experiences-which were, in part, a
consequence of their own cost allocation procedures. As a result, they were willing to
yield the fastest growing segment ofthe U.S. automobile market to Japanese and Euro
pean imports. Similar beliefs explain the complacency of British and U.S. motorcycle
manufacturers in the face ofJapanese competition (see Exhibit 4.3).

~USTRY ANALYSIS

iompany driven by
~ or GEC pIc is a
!share goals such as
~ ROI objective is
fat. Such a reaction
~ritish motorcycle
.cs industry have
anies to Japanese
market segments
Gamble to com
eting competition
, promotions, and
t losses for up to

~portant to com
~~ of the subsid
~ Important. How
~

respond to com

~or's objectives is

~ore a company is
~ with the present
~ng well short of
Fcompanied by a

99

COMPETITOR ANALYSIS

EXHIBIT 4.3
Motorcycle Myopia
During the 1960s, the motorcycle markets in Brit
ain and the United States were dominated by
BSA and Harley-Davidson, respectively. At the
beginning of the 1960s, Japanese manufactur
erSt spearheaded by Honda, began to make
inroads into the market for small bikes in both
countries. The leading British and U.S. manufac
turers discounted the Japanese threat, princi
pally because of their disregard for smaller
motorcycles.
Eric TurnE!r, chairman of BSA ltd (manufac
turE!r of Triumph and BSA motorcycles) com
menwd in 1965:
The success of Honda, Suzuki, and
Yamaha has been Jolly good for us.
People start out by buying one of thE!
low-priced Japanese jobs. They get to
.enjoy the fun and exhilaration of the
open road and they frequently end up
buying one of our more powerful and
expensive machines. 26

Similar complacency was expressed by William

Davidson, president of Harley-Davidson:
Basically, we do not believe in the light
weight market. We believe that motorcy
cles are sports vehicles, not transportation
vehicles. Even if a man says he bought a
motorcycle for transportation, it's gener
ally for leisure time use. The lightweight
motorcycle is only supplemental. Back
around World War I, a number of compa
nies carne out with lightweight bikes. We
came out with one ourselves. We came
out with another in 1947 and it just didn't
go anywhere. We have seen what hap
pens to theSe small sizes. 27
By the end of the 1970s, BSA and Triumph
had ceased production and Harley-Davidson was
barely surviving. The world motorcycle industry,
including the large bike segments, was domi
nated by the Japanese.

~rofitability disci

uring the early

s resulting from

rs were not sub

i ld market prices.

petitor's strate
ld and of itself)
neral. Both are
ut their indus
,at, not only do
~onverge within
~re to very simi
~cess have been

I.,tIre industry, to

ithat established

Iring the 1960s,

small cars were
were, in part, a
were willing to
nese and Euro
1.S. motorcycle

4. Identifying the Competitor's Capabilities.

Predicting a competitor's
future strategy is not enough. The key issue for a firm is evaluating the seriousness of
a potential challenge. The extent to that a competitor threatens a company's market
position depends on the competitor's capabilities. Detailed analysis of resources and
capabilities is deferred to the next chapter. At this stage, the key elements are an
examination of the firm's principal categories of resources including financial
reserves, capital equipment, work force, brand loyalty, and management skills,
together with an appraisal of capabilities within each of the major functions: R&D,
production, marketing, distribution, and so on.
Circumspection in evaluating a competitor's capabilities is essential before
embarking on a strategy that may provoke a competitor. Many brilliant and innova
tive new companies have failed to withstand the aggressive reactions of established,
well-financed incumbents. In the U. S. airline industry, most of the new entrants of
the early 1980s had been forced out of business by the end of the decade. Con
versely, the trepidation felt by established companies in network software, Internet
browser software, on-line news, information, and entertainment over Microsoft's
entry in these markets is a result of Microsoft's huge financial resources, its market
ing muscle, and its fearsome reputation for market dominance.

100

INTRA-INDUSTRY ANALYSIS

SU

Applying the Results of Co:rnpetitor Analysis

For the purpose of strategy formulation, competitor analysis is useful both in pre
dicting how competitors are likely to behave, and in influencing their behavior.

1. Predicting Competitors' Behavior.

The first question we want to answer

is: "What strategy shifts is the competitor likely to make?" This requires that we
carefully identifY current forces that are likely to provoke a change in strategy. These
may be external-a shift in consumer preferences or regulatory change that may
have important consequences for the firm-or they may be internal-a failure to
achieve current financial or market share targets, or divisive conflict within the com
pany. Whatever the sources, a careful identification of current st'rategy and goals and
the company's assumptions about the industry and its capabilities provide a sound
basis on which to forecast the direction of change.
Second, we may wish to forecast a competitor's likely reactions to a proposed
strategy change that our own company is initiating. If this strategy change
involves an attack on the competitor's market base, then his reactions may be cru
cial in determining the desirability of the strategy change. The same four elements
together provide useful guidance as to the nature, likelihood, and seriousness of a
defensive reaction by the competitor. When Honda first attacked BSNTriumph
and Harley-Davidson with the introduction of a large-capacity motorcycle,
Honda knew that:
Both companies pursued medium-term financial goals rather than market

share goals

Both firms were benefiting from an upsurge in motorcycle demand; hence,

they were not unduly sensitive to losses in market share
Both firms believed that, due to their own customer loyalty and brand image,

the Japanese producers were not a serious threat in the big bike market

Even if BSAlTriumph and Harley-Davidson did react aggressively, the

effectiveness of their response would be limited by their weak financial posi

tions and by their lack of innovation and manufacturing capabilities.

2. Influencing Competitors' Behavior: Signaling and Credible Threats.

Understanding one's competitors can assist the firm in influencing its competitors'
behavior. Competitor reaction depends not only on what the firm does, but also on
what the competitor believes that its rival is doing. The term signaling is used to
describe the selective communication of information to competitors designed to
influence competitors' perceptions and behavior in order to provoke or avoid certain
types of reaction.1 9 The use of diversionary attacks and misinformation is well
developed in military warfare. In 1944, Allied deception was so good that even dur
ing the D-Day landings in Normandy, the Germans believed that the main invasion
would occur near Calais.
The principal role of signaling is to provide clear threats to competitors of the
company's intention to aggressively react to any rival's competitive move. Such sig
nals need to be credible. It has been argued that some firms deliberately over-invest
in order to have available capacity that can be used to flood a competitor's market, if
that competitor does not toe the industry line with regard to acceptable competitive
behavior. Such strategic excess capacity may be particularly valuable in deterring
entrants. The classic example is Alcoa's use of capacity expansion as a warning to
potential entrants into the U.S. aluminum industry (United States versus Alcoa,

)USTRY ANALYSIS

101

SUMMARY

1945). However, subsequent studies have suggested that this practice is far from
prevalent. 20
The credibility of threats is critically dependent on the reputation of a company.21
Even though carrying out threats against rivals is costly and depresses short-term
profitability, such threats can build a reputation for aggressiveness that deters compet
itors in the future. The benefits ofbuilding a reputation for aggressiveness may be par
ticularly great for diversified companies where reputation can be transferred from one
market to another. 22 Hence, Procter & Gamble's protracted market share wars in dis
posable diapers and household detergents have established a reputation for toughness
that protects it from competitive attacks in other markets. Fortune magazine identifies
Gillette in razors and razor blades, Anheuser-Busch in beer,. and Emerson Electric in
sink disposal units as examples of companies whose aggressive quest for market share
has gained them reputations as "killer competitors," which has encouraged a number
of rivals to give up the fight. 23
Signaling may also be used to maintain a cozy industry environment of cooper
ation and restrained competition among firms. One means of avoiding price compe
tition in an industry is for firms to follow a pattern of price leadership. In the UK
gasoline market, the initiation of a price increase by a firm is normally preceded by a
period of consensus building during which the firm tests the water by press releases
that announce "the unsatisfactory level of margins in the industry," the "need for a
price increase to recoup recent cost increases," and the likelihood that "a price
increase will become necessary in the near future.,,24

lseful both in pre

peir behavior.
lVe want to answer

$ requires that we

i in strategy. These
: change that may
~rna1-a failure to
~ within the com
legy and goals and
Sprovide a sound
~ns to a proposed
,strategy
change
I.
~ons may be cru
me four elements
seriousness of a
BSNTriumph
ity motorcycle,

er than market

~SUMMARY

d brand image,
e market

e Threats.

its competitors'

es, but also on

.ng is used to

rs designed to

r avoid certain

ation is well

that even dur

main invasion

petitors of the

ove. Such sig

ely over-invest

tor's market, if

Ie competitive

e in deterring

, a warning to

versus Alcoa,

The industry analysis in Chapter 3 provided a first stage analysis of a company's

industry environment. In this chapter we recognize the internal complexity of indus
tries and go beyond industry-level analysIs of competition and success factors to ana
lyze where a firm positions itselfwithin its industry, and how it out-maneuvers rivals.
Segmentation analysis disaggregates industries and markets, permitting a
company to:
IdentifY segments with the greatest profit potential
IdentifY strategies to exploit Key Success Factors within a segment
Evaluate the merits of a niche strategy, compared with a broader, multiseg
ment strategy
The ability to identifY and occupy attractive segments of an industry is critical to
success. Hewlett-Packard's superior performance in the office electronics industry dur
ing the late 1980s was primarily due to its ability to quickly identifY slowing sales and
falling margins in the minicomputers segment, and swiftly shift its emfhasis toward
personal computers (desktops and workstations) and laser printers. 2 Location of
attractive industry segments must be supported by clear understanding of Key Success
Factors within those segments. The Gap, Gymboree, and Wal-Mart are all successful
retailers of children's clothes, but their strategies are quite different, reflecting the dif
ferent requirements of their respective segments of the children's clothes market.
Analysis of competition may need to extend to an even more micro level. Where
a company faces a few close competitors, it is not possible to understand competition
without understanding the competitors themselves. Understanding a competitor
requires identification of its goals, current strategy, assumptions, and capabilities.

102

INTRA-INDUSTRY ANALYSIS

"Getting inside" competitors in order to understand and influence competitive

interaction lies at the heart of strategy analysis. An essential characteristic of suc
cessful strategists, whether corporate chief executives, military commanders, politi
cal leaders, or chess players, is their ability to insightfully analyze their opponents.

NOTES

1 "Computer Companies Rush to Servers to Boost Profits," Wall Street Journal, May 6,
1994: B6.
2 This section draws heavily on the approach used by Michael E. Porter, Competitive
Advantage (New York: Free Press, 1985): chapter 7.

3 Alfred P. Sloan, My Years with General Motors (London: Sidgewick &Jackson, 1963): 65,
67.
4 For a formal analysis of mobility barriers, see Richard E. Caves and Michael E. Porter,
"From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deter
rence to New Competition," QuarterfyJournal ofEconomics 91 (1977): 241-262.
5 William H. Davidson and Bro Uttal, "Service Companies: Focus or Falter," Harvard
Business Review (July-August 1989): 77-84.
6 Michael E. Porter, Competitive Strategy (New York: Free Press, 1980): 129.
7 For further discussion of strategic groups and their role in strategy analysis, see John
McGee and Howard Thomas, "Strategic Groups: Theory, Research, and Taxonomy,"
Strategic ManagementJournal7 (1986): 141-160.
8 Michael Hunt, Competition in the Major Home Appliance Industry, doctoral dissertation,
Harvard University, 1973; and Michael E. Porter, "Structure Within Industries and
Companies' Performance," Review ifEconomics and Statistics 61 (1979): 214-227.
9 Ken Hatten, Dan Schendel, and Arnold Cooper, ''A Strategic Model of the U.S. Brew
ing Industry," Academy ofManagementJournal21 (1978): 592-610.
10 Karl Cool and Dan Schendel, "Strategic Group Formation and Performance: The Case
of the U.S. Pharmaceutical Industry," Management Science 33 (1987): 1102-1124; A.
Feigenbaum and H. Thomas, "Strategic Groups and Performance: The U.S. Insurance
Industry," Strategic ManagementJournal 11 (1990): 197-215.
11 K. Cool and I. Dierickx, "Rivalry, Strategic Groups, and Firm Profitability," Strategic
ManagementJournal14 (1993): 47-59.
12 Ken Smith, Curtis Grimm, and Stefan Wally, "Strategic Groups and Rivalrous Firm
Behavior: Toward a Reconciliation," Strategic ManagementJournal18 (1997): 149-157.
13 R. K. Reger and A. S. Huff, "Strategic Groups: Cognitive Perspective," Strategic Man
agementJournaf14 (1993): 103-124.
14 For an analysis of such interdependence, see Michael E. Porter and A. M. Spence, "The
Capacity Expansion Process in a Growing Oligopoly: The Case of Corn Wet Milling,"
in The Economics of Information and Uncertainty, ed. ]. McCall (Chicago: University of
Chicago Press, 1982).
15 "They Snoop to Conquer," Business Week, October 28,1996: 172-176.
16 Henry Mintzberg, "Opening up the Definition of Strategy," in The Strategy Process: Con
cepts, Contexts and Cases, ed. Qyinn, Mintzberg and James (Englewood Cliffs, N]: Pren
tice-Hall,1988).
17 Boston Consulting Group, Strategy Alternatives fOr the British Motorcycle Industry (Lon
don: Her Majesty's Stationery Office, 1975); M. Dertouzos, R. Lester, and R. Solow,
Made in America: Regaining the Productive Edge (Cambridge, MA: MIT Press, 1989).
18 J.-CO Spender, Industry Recipes: The Nature and Sources if ManagerialJudgement (Oxford:
Basil Blackwell, 1989). The propensity for social interaction to result in a convergence of
perceptions and beliefs is commonly referred to as "groupthink" and has been discussed
by Anne Huff, "Industry Influences on Strategy Reformulation," Strategic Management
Journaf3 (1982): 119-131.

-----~.-

USTRY ANALYSIS

NOTES

lence competitive
racteristic of suc
~~anders, politi
ilelr opponents.

~et Journal,

May 6,

Porter, Competitive

rackson, 1963); 65,

Michael E. Porter
Contrived Deter~
241-262.
r Falter," Harvard

103

19 For a review of theory and research on competitive signaling, see O. Heil and T. S. Rob
ertson, "Toward a Theory of Competitive Market Signaling: A Research Agenda," Stra
tegic Management Journa112 (1991): 403-418.
20 Marvin B. Leiberman, "Excess Capacity as a Barrier to Entry: An Empirical Appraisal,"
Journal ofIndustrial Economics 35 (1987): 607-627.
21 For a survey of the strategic role of reputation, see Keith Weigelt and Colin Camerer,
"Reputation and Corporate Strategy: A Review of Recent Theory and Applications,"
Strategic ManagementJournal 9 (1988): 443-454.
22 P. Milgram and]. Roberts, "Predation, Reputation, and Entry Deterrence," Journal of
Economic Theory 27 (1982): 280-312.
23 "Companies That Compete Best," Fortune, May 22, 1989: 36-44.
24 Robert M. Grant, "Pricing Behavior in the UK Wholesale Market for Petrol,"Journalof
Industrial Economics 30 (1982): 271-292.
25 "Hewlett-Packard's Screeching Turn Toward Desktops," Business Week, September 11,
1989: 106-112.
26 Advertising Age, December 27,1965, quoted by Richard T. Pascale, "Honda A," Harvard
Business School, Case 9-384-049, 1983.
27 Forbes, September 15, 1966.

L29.
analysis, see John
, and Taxonomy,"

toral dissertation
n Industries and
214-227.
f the U.S. Brew

mance; The Case

; 1102-1124; A.
I: U.S. Insurance

lIbility," Strategic

Rivalrous Firm
97): 149-157.

Strategic Man

1. Spence, "The
1 Wet Milling,"
); University of

[Y Process: Con

Liffs, ;-../]: Pren

rndustry (Lon

1R. Solow,
:ss,1989).
ment (Oxford;
onvergence of
een discussed
Management

DUSTRY ANALYSIS

auence competitive
acteristic of suc
mmanders, politi
I eir opponents.

I
eet Journal, May 6,

Porter, Competitive
Jackson, 1963): 65,
Michael E. Porter,
Contrived Deter
241-262.
r Falter," Harvard
129.
analysis, see John
, and Taxonomy,"
oral dissertation
.n Industries and
214--227.
f the U.S. Brew
ance: The Case
: 1102-1124; A.
e U.S. Insurance
bility," Strategic

. Spence, "The
Wet Milling,"
: University of

ndustry (Lon

R.Solow,
ess,1989).
ment(Oxford:

onvergence of
een discussed
Management

---

NOTES

103

19 For a review of theory and research on competitive signaling, see O. Heil and T. S. Rob
ertson, "Toward a Theory of Competitive Market Signaling: A Research Agenda," Stra
tegic ManagementJournal 12 (1991): 403-418.
20 Marvin B. Leiberman, "Excess Capacity as a Barrier to Entry: An Empirical Appraisal,"
Journal ofIndustrial Economics 35 (1987): 607-627.
21 For a survey of the strategic role of reputation, see Keith Weigelt and Colin Camerer,
"Reputation and Corporate Strategy: A Review of Recent Theory and Applications,"
Strategic ManagementJournal 9 (1988): 443-454.
22 P. Milgrom and J. Roberts, "Predation, Reputation, and Entry Deterrence," Journal of
Economic Theory 27 (1982): 280-312.
23 "Companies That Compete Best," Fortune, May 22, 1989: 36-44.
24 Robert M. Grant, "Pricing Behavior in the UK Wholesale Market for Petrol,"Journal of
Industrial Economics 30 (1982): 271-292.
25 "Hewlett-Packard's Screeching Turn Toward Desktops," Business week, September 11,
1989: 106-112.
26 Advertising Age, December 27, 1965, quoted by Richard T. Pascale, "Honda A," Harvard
Business School, Case 9-384-049, 1983.
27 Forbes, September 15, 1966.