Professional Documents
Culture Documents
Competitor Map
Assessing Competitors
Determining Competitor’s Objectives
• Example:
• Intel needs Rival AMD
Designing a Competitive
Intelligence System
• The competitive intelligence system first
identifies the vital types of competitive
information and the best sources information.
Then the system continuously collects
information from the field:
– Sales Force
– Channels
– Suppliers
– Market Research Firms
– Trade associations
– Websites
– Government Publications, speeches and/or articles
Designing a Competitive
Intelligence System
• With such system it is for managers to get
all information about competitors
• For smaller companies they can delegate
the task to research about the competitor,
outsource the service or the managers
themselves do it.
COMPETITIVE STRATEGIES
Approaches to Marketing
Strategy
• No one strategy (strat) is best for a
company.
• Companies differ in how they approach
the strategy planning process.
Example: P&G and IBM’s strat is
Different from Harley Davidson, BMWs
MINI unit.
Approaches to Marketing
Strategy
• Approaches to marketing strategy pass through
the following stages:
– Entrepreneurial Marketing
• Companies can do better with less advertising, less
marketing research, more guerilla marketing.
– Formulated Marketing
• As small companies achieve success, they inevitable move
toward more-formulated marketing
– Intrepreneurial Marketing
• Many large companies get stuck in the formulated marketing
and sometimes lose marketing creativity and passion
• When this happens then analysts say that it is time to go
back to the Entrepreneurial Marketing approach.
Basic Competitive Strategies
• Three decades Michael Porter suggested four basic
competitive positioning strategies that companies can
follow – three winning and one losing one. The three
winning ones include:
– Overall cost leadership – the company works hard
to achieve the lowest production and distribution costs
that allows it to price lower that its competitors and
win large market share.
– Differentiation – the company concentrates on a
creating a highly differentiated product line and
marketing program so that it comes across as the
class leader of the industry.
– Focus – the company focuses its effort on serving
few market segments well rather than going after the
whole market.
Basic Competitive Strategies
– Operational Excellence – Company provides
superior value by leading its industry in price and
convenience. It serves customers who want reliable,
good quality products and services, but who want
them cheaply and easily.
– Customer Intimacy – Company provides superior
value by precisely segmenting its markets and
tailoring its products or services to match exactly the
needs of the target customers.
• Customer intimate companies serve customers who are
willing to pay a premium to get precisely what they want.
Basic Competitive Strategies
– Product Leadership – company provides
superior value by offering a continuous
stream of leading-edge products or services
aiming to make its own and competing
products obsolete.
• Product leaders are open to new ideas
continuously innovating.
• They serve customers who want state-of-the-art
products and services, regardless of the cost in
terms of price or inconvenience.
Competitive Positions
Four Competitive Positions:
• Market Leader – The firm in an industry with the largest
market share
• Market Challenger – A runner-up firm that is fighting
hard to increase its market share in an industry.
• Market Follower – A runner up firm that wants to hold
its share in an industry with out rocking the boat.
• Market Nicher – A firm that serves small segments that
the other firms in an industry overlook or ignore
Competitive Positions
Market Leader Strategies
• Firms leading the industry such as:
McDonald’s (fast food), SM Malls (retail),
Microsoft (Computer Software), Nike
(Athletic Footwear) and Google (Internet
Search Engine)
• Leader should maintain a constant watch
as other firms keep challenging the firm’s
strengths and taking advantage of its
weaknesses.
Market Leader Strategies
To remain on the top:
• Find ways to expand total demand
• Developing new users, uses and more usage of its products.
• Protect their current Market Share through good and offensive
action
• Work on weakness and create opportunities from them
• The best defense is a good offense and the best response is
often CONTINUOUS INNOVATION.
• A leader refuses to be content with the way things are and
should lead the industry
4. Try to expand their market share further even if market size remains
constant.
• The cost of buying higher market share may far exceed the
returns
• Higher shares tend to produce higher profits only when unit
costs fall with increased market share or when the company
offers high-quality products with a premium price that covers
all costs and creates revenue.
Market Challenger Strategies
• A market challenger must first define which
competitors to challenge and its strategic
objective
• The challenger can attack the market leader and
other competitors in an aggressive bid for more
market share. Or they can play along with
competitors (market challenger) and not rock the
boat (market followers)
• Alternatively, the challenger can avoid the leader
and instead challenge the firms its own size, or
smaller local and regional firms.
Market Follower Strategies
• Not all runner-up companies want to
challenge the market leader since most
often they are never taken lightly by the
leader.
• Sometimes it is more strategic to just be a
follower.
Market Nicher Strategies
• There is always a small share in the
market called the ‘nichers’ where these
segments are the ones vulnerable to
something new.
• It can be an effective way to start small
and grow from there rather than going
against big players in the industry.
THE END