competitor orientation

Question 1

What are the porter’s 5 forces?

Answer 1

• Rivalry amongst existing competitors
• Threat of New Entrants
• Threat of Substitute Products
• Buyer’s bargaining power
• Supplier’s bargaining power

Question 2

What is the industry concept of competition?

Answer 2

• Market type (no. of sellers, degree of differentiation)
• Entry, Mobility, exit barriers
• Cost structure
• Degree of vertical integration
• Degree of globalization

Question 3

What is the market concept of competition?

Answer 3

• Indirect competition: diff category but serve as alt. purchase choice
• Direct competition: same category

Question 4

What is a strategic group?

Answer 4

• group of firms following same strategy in given target mkt
• line of pdts, costs, service quality, price

Question 5

How to assess competition’s strengths/weaknesses?

Answer 5

• Critical success factors
• Customer value analysis: of product features + their perceived importance to consumers
• Market share, mind share, heart share
• Review assumptions held by competitors

Question 6

What are the 4 competitor reactions?

Answer 6

laid back
selective
tiger
stochastic (random)

Question 7

What are the possible positions of the competitor?

Answer 7

• Cost leadership: but focus on cost, vulnerable to inertia
• Differentiation: of 4PS, service
• Focus (cost focus, differentiation focus)
• Middle-of-the-Roaders

Question 8

What are the different market members and their characteristics?

Answer 8

Market leader (40%)
o Defence: position, flank, pre-emptive, counter-offensive, mobile
o Expand share: assume share/profit related
o Expand market: new user, more usage, more uses

Market challenger (30%)
o	Define objective + opponents → attack leader
o	Attack: frontal, flank, encirclement, bypass, guerilla 
o	Specific: price discount, prestige, pdt proliferation, improve service, innovation, low costs, intense ad 

Market follower (20%)
o Incapable of challenging
o Strategies: counterfeit, clone, imitate, adapt

Market nicher (10%)
o	High margins, low volumes
o	Specialise: end-user, vertical-level, customer-size, specific customer, geographic, product/product line, product-feature, quality price, service, channel

Question 9

What is the difference between customer and competitor focus?

Answer 9

Customer focus: LR projects, needs of consumers, seek opportunities

Competitor focus: fighter orientation, alert, exploit weakness

Question 10

What is the difference between market share strategy and loyalty strategy?

Answer 10

Market share strategy: goal: buyer switching, focal point competition, success: mkt share

Loyalty strategy: goal: buyer loyalty, focal point customers, success: customer share/retention rate

Question 11

What is the need for customer relationship management?

Answer 11

• Need for CRM: changing dem., more sophisticated competitors, losing 1 customer = entire customer lifetime value, costs 5x more to attract than keep customer satisfied

Question 12

What is customer satisfaction; expectations, total customer satisfaction, marketing

Answer 12

• Expectations: past buying experiences, opinions of friends, marketer and competitor info
• total customer satisfaction: not maximum, just necessary not sufficient condition for customer loyalty
• marketing: generate customer value profitability → customer satisfaction without sacrificing profits

Question 13

What are loyal customer and how to keep them?

Answer 13

Loyal customers: emotional and rational preferences, less price sensitive, remain longer, talk favorably

• Preference formation: initial exposure (1st to market, to youth), media and promotion campaign
• Customer retention: consistency of superior value, gain trust, focus on right customers, manage feedback, provide extras, create high switching costs

Question 14

What is the price quality matrix?

Answer 14

Quality strategy

• High share → low cost → profit
• High price → high margin → profit

Margin strategy

• Quality → high cost → profit
• Quality → high price → profit