Analysing Competitors and Creating a Competitive Advantage - Chapter 19 Flashcards
competitive behaviour
the activities of rival companies with respect to each other; this can take 5 forms- conflict, competition, co-existence, cooperation and collusion
competitive scope
the breadth of a company’s competitive challenge, for example broad or narrow
competitor audit
a precise analysis of competitor strengths and weaknesses, objectives and strategies
core competences
the principal distinctive capabilities possessed by a company- what it is really good at
counter-offensive defence
a counter-attack, an attach on the attacker’s cash cow or encirclement of the attacker
differential advantage
a clear performance differential over the competition on factors that are important to target customers
differentiation strategy
the selection of one or more customer choice criteria and positioning the offering accordingly to achieve superior customer value
divest
to improve short-term cash yield by dropping or selling off a product
entry barriers
the act to prevent new companies from entering a new market, e.g. the high level of investment required
encirclement attack
attacking the defender from all sides e.g. every market segment is hit with every combination of product features
experience curve
the combined effect of economies of scale and learning as cumulative output increases
flanking attack
attack geographical areas or market segments where the defender is poorly represented
flanking defence
the defence of a hitherto unprotected market segment
frontal attack
a competitive strategy where the challenger takes on the defender head on
guerrilla attack
making life uncomfortable for stronger rivals through e.g. unpredictable price discounts, sales promotions or heavy advertising in a few selected regions
harvest objective
the improvement of profit margins to improve cash flow even if the longer term result is falling sales
hold objective
a strategy of defending a product in order to maintain market share
industry
a group of companies that market products that are close substitutes for each other
mobile defence
involves diversification or broadening the market by redefining the business
niche
a small market segment
position defence
building a fortification around existing products, usually through keen pricing and improved promotion
pre-emptive defence
usually involves continuous innovation and new product development, recognising that attack is the best form of defence.
strategic alliance
collaboration between two or more organisations through e.g. joint ventures, licensing agreements, long term purchasing and supply arrangement, or a joint R&D contract to build a competitive advantage
strategic focus
the strategies that can be employed to achieve an objective
strategic withdrawal
holding onto the company’s strengths while getting rid of its weaknesses
value chain
the set of company’s activities that are conducted to design, manufacture, market, distribute and service its products.
