Certified Supply Chain Professional (CSCP) Practice Exam

What is competitive analysis primarily concerned with?

1. Developing new products

2. Examining competitors' strategies and prices

3. Enhancing customer service

4. Reducing operational costs

The correct answer is: Examining competitors' strategies and prices

Competitive analysis is primarily concerned with examining competitors' strategies and prices. This process involves a thorough investigation of the marketplace to understand how competitors operate, the pricing structures they employ, and the strategies they utilize to gain market share. By analyzing these aspects, businesses can identify their own strengths and weaknesses in relation to their competitors, allowing them to make informed decisions regarding positioning, market entry, and overall strategic direction. Understanding competitors' strategies helps organizations to anticipate market trends and customer preferences, enabling them to respond effectively. It also aids in identifying gaps in the market where a business can differentiate itself, potentially leading to increased competitive advantage. This kind of analysis typically involves looking at various elements such as product offerings, marketing tactics, supply chain structures, and customer engagement methods, all of which are critical for maintaining relevance and competitiveness in the industry. The other options, while important in their own right, do not directly capture the essence of competitive analysis. Developing new products focuses on innovation rather than understanding the competitive landscape. Enhancing customer service is more about internal performance than competitive evaluation. Reducing operational costs pertains to efficiency and profitability but does not involve analyzing competitor behavior directly. Hence, the focus on examining competitors' strategies and prices stands out as the primary concern of competitive analysis.