chapter 4 - marketing principle #3: all competitors react -> managing sustainable competitive advantage

Question 1

sustainable competitive advantages (SCAs)

Answer 1

= anticipating and preparing for competitors by building and maintaining barriers to competitive attacks for long-term success
–> good SCA meets 3 criteria:
1. Customers care about what this SCA offers.
2. The firm does it better than competitors, which generates a relative advantage.
3. The SCA must be hard to duplicate or substitute, even with significant resources

Question 2

3 sources of SCA

Answer 2

BOR –> brands, offerings, relationships
= are additive and often work synergistically to give a firm a strong relative position in the marketplace

Question 3

brands

Answer 3

• barriers to duplication: brand images reside in consumers’ minds, makes them difficult to duplicate, facilitates habitual buying through awareness & provides identity benefits to customers
• most effective in: large consumer markets

Question 4

offerings

Answer 4

• barriers to duplication: cost benefits, performance advantages, access to distribution channels
• most effective in: most markets, technology based businesses

Question 5

relationships

Answer 5

• barriers to duplication: leads to trust, commitment, and interpersonal reciprocal bonds that are hard to build or duplicate
• most effective in: business-to-business markets, services, complex products

Question 6

competitors displace firms by overcoming SCA by:

Answer 6

1. Technical innovations that provide competitors with a platform to launch a disruptive offering
2. Exploiting changes in customers’ desires due to cultural, environmental, or other factors
3. Individual entrepreneurship that constantly seeks a better way to solve a problem
4. Me-too copycats that improve the efficiency or effectiveness of an existing execution

Question 7

framework for managing sustainable competitive advantage

Answer 7

Inputs (MP#1&2):
- positioning statements
- AER strategies
- future trends
–>
managing sustainable competitive advantage:
- approaches & processes
- analyses
–>
outputs (SCA, BOR):
- SCAs
- BOR strategies

Question 8

inputs (MP#1&2) framework

Answer 8

1. Positioning statements (#1)= answers key questions; Who is the customer? What set of needs does the product or service fulfil? Why is this product/service the best option to satisfy customer needs (relative to competition)?
   - STP (segmentation, targeting, positioning) process
   - AER strategies positioning statements= focus in detail (internally) on the firm’s
   existing customers by answering who, what, why, and when questions
2. AER strategies (#2)= describe the process for reaching the objectives defined by the
   positioning statements.
3. Future trends= captures the long-term technology, regulatory, and socioeconomic
   trends.

Question 9

outputs framework

Answer 9

1. The firm’s SCA now and in the future= need to address the three SCA conditions.
2. BOR strategies= aggregate and reorganize each targeted customer segment and
   persona according to its needs and the most effective strategies across time

Question 10

process for managing SCA

Answer 10

1. Acquisition, expansion, and retention (AER) strategy grid= each box describes the most effective strategy for each unique person.
2. Key environmental trends= long-term technology or regulatory changes so that investments in BOR strategies lead to SCA.
3. Brand, offering, and relationship (BOR) equity grid= offers high-level summary of what the firm is trying to achieve with each BOR strategy in its effort to meet its own positioning objectives while withstanding competitive attacks, now and in the future