Competitive strategy Flashcards
Competitive advantage
Competitive advantages require delivering more value and satisfaction to target consumers than competitors.
Competitor analysis
Competitor analysis is the process of identifying, assessing and selecting key competitors.
Competitive marketing strategies
Competitive marketing strategies are how companies analyze their competitors and develop value-based strategies for profitable customer relationships.
Competitors
Competitors: other companies offering similar products and services to the same customers at similar prices. Competitors can include:
* All firms making the same product or class of products.
* All firms making products that supply the same service.
* All firms competing for the same consumer dollars.
Assessing Competitors
Competitors’ objectives:
* Profitability
* Market share growth
* Cash flow
* Technological leadership
* Service leadership
Competitors’ strategies:
* Strategic group offers the strongest competition
Competitors’ strengths and weaknesses:
* What can our competitors do?
* Benchmarking
Estimating competitors’ reactions
* What will our
competitors do?
Strategic group
A strategic group - is a group of firms in an industry following the same or a similar strategy in a given target market.
Selecting Competitors to Attack and Avoid (STRONG AND WEAK COMPETITORS)
Weak competitors - fewer resources and less time – little gain
Strong competitors - greater returns – they may have weaknesses
Customer value analysis
Customer value analysis determines the benefits that target customers’ value and how customers rate the relative value of various competitors’ offers.
- Identification of major attributes that customers value and the importance of these values.
- Assessment of the company’s and competitors’ performance on the valued
attributes.
Blue Ocean strategy
- Finding uncontested market spaces.
- To create products and services for which there are no direct competitors.
The goal is to make competition irrelevant
Designing a Competitive Intelligence System
Identifies competitive information and the best sources of this information
Continuously collects information
Checks information for validity and reliability
Interprets information
Organizes information
Sends key information to relevant decision makers
Responds to inquiries about competitors
Michael Porter’s Four Basic
Competitive Positioning Strategies
Overall cost
leadership Differentiation
Focus Middle of the road
Overall cost leadership strategy:
A company achieves the lowest production and distribution costs and
allows it to lower its prices and gain market share.
Focus strategy:
A company focuses its effort on serving few market segments well rather than going after the whole market.
Differentiation strategy:
A company concentrates on creating a highly differentiated product line and marketing program so it comes across as an industry class leader.
Middle-of-the-roader
A company that pursues a clear strategy will achieve superior performance.
A company without a clear strategy, “a middle-of-the-roader”, will not succeed.
Competitor Strategies -
Competitive Positions
Market leader strategies: expand total market; protect market share; expand market share.
Market challenger strategies: full frontal attack; indirect attack.
Market follower strategies: follow closely; follow at a distance.
Market nicher strategies: by customer, market, quality, price, service; multiple niching
Market Leader Strategies - Expanding market demand
Expand total market demand by attracting/developing:
* New users
* New uses
* More usage
Market leader strategies - Expanding market share
Expand market share by :
* Increasing profitability with increasing
market share in served markets
* Producing high-quality products
* Creating good service experiences
* Building close relationships
Market Leader Strategies - Protecting current market
Protect current market by:
* Fixing or preventing weaknesses that provide opportunities to competitors
* Maintaining consistent prices that provide value
* Keeping strong customer relationships
* Promoting continuous innovation
Market Challenger Strategies
Challenge the leader with an aggressive bid for more market share.
Second mover advantage: Challenger observes what has made the leader successful and improves on it.
Market Follower Strategies
- Play along with competitors and not rock the boat.
- Copy or improve on leader’s products and programs with less investment.
- Bring distinctive advantages.
- Keep costs and prices low or quality and services high.
Market Nicher Strategies
An ideal market niche is big enough to be profitable with high growth potential and has little interest from competitors.
The key to market niching is specialization:
* Market
* Customer
* Product
* Marketing mix
