18 - Competitive Advantage Flashcards
competitive advantage
advantage gained by offering consumers superior value
two main steps in competitive marketing
competitor analysis
developing a competitive marketing strategy
competitor analysis
- identifying competitors
- assessing their: objectives, strategies, strengths + weaknesses and reaction patterns
- selecting which to attack and which to avoid
what must companies avoid when analysing competitors
“competitor myopia”
- a company is more likely to be “buried” by its latent competitors than its current ones
main ways of identifying competitors
industry point of view - selling similar product/service
market point of view - trying to satisfy same need or same group
importance of assessing competitors objectives
reveals competitor’s:
- satisfaction w/ its current situation
- how it might react to different competitive actions
- objectives: profitability, market share growth, cash flow, technological leadership, service leadership…
importance of assessing competitors strategies
places firm’s into strategic groups
- members of the groups became its key competitors
powerful tool for increasing competitiveness
benchmarking
comparing the company’s products/processes to competitors or leading firms to identify best practices + ways to improve quality and performance
customer value analysis
analysis conducted to determine what benefits target customers value and how they rate the value of various competitors’ offers
steps in a competitive intelligence system
identifies competitive information needed + best sources for this info
collects information from field + published data
checks the information for validity + reliability
interprets it
organizes it
sends relevant information to decision makers + responds to inquiries from managers about competitors
three stages of approaches to marketing strategy
entrepreneurial marketing - seeing an opportunity and creating + implementing flexible strategies
formulated marketing - developing formal marketing strategies and following them closely
intrapreneurial marketing - attempt to reestablish entrepreneurial spirit and refresh marketing strategies and approaches
Michael Porter’s four basic competitive positioning strategies
overall cost leadership
differentiation
focus - market segment
middle of the road - w/out clear strategy
- three winning strategies and one losing one
three value disciplines
strategies for delivering superior customer value
- operational excellence
- customer intimacy
- product leadership
operational excellence
provides superior value by leading in price + convenience
- works to reduce costs and create an efficient value delivery network
customer intimacy
provides superior value by segmenting its markets and tailoring its products/services to match the needs of targeted customers
product leadership
provides superior value by continuously offering innovative products/services
different competitive positions
market leader - largest market share
market challenger - fighting hard to increase its market share
market follower - wants to hold its share
market nicher - serves small segments often ignored by other firms
market leader strategies
expand total demand
protect market share (eliminate competition)
expand market share
market challenger strategies
full frontal attack (matching competitors strategy - attacks strengths rather than weaknesses)
indirect attack (focus on competitors’ weaknesses)
market follower strategies
follow closely
follow at a distance
market nicher strategies
focus on: customer, market, quality, price, service
multiple niching
marketing orientation
competitor-centered - moves are mainly based on competitors’ actions + reactions
customer-centered - focuses on customer developments
market-centered company - pays balanced attention to both customers + competitors
product-centered - pays little attention to either customers or competitors
