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Dealing with Competition
Tonette Viray
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• How do marketers identify primary competitors?
• How should we analyze competitors’ strategies, objectives, strengths, and weaknesses?
• How can market leaders expand the total market and defent market share?
Outline
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• How should market challengers attack market leaders?
• How can market followers or nichers compete effectively?
Outline
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5 Competitive Forces
Substitute
Buyers
New entrant
SuppliersSegment Rivalry
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Industry Concept of Competition
1. # of sellers and degree of differentiation 2. Entry, Mobility and Exit Barriers 3. Cost Structure4. Degree of Vertical Integration5. Degree of Globalization
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narrow linemoderate line
full linebroad
line
Strategic Groups
Base on Vertical Integration
high
low
quality
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Customer’s Rating of Competitor’s on key Success factors
Customer awareness
Product quality
Product AvailabilityTechnical
Assistance
Selling Staff
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3 Variables
Strengths & Weaknesses
Share of market
Share of heartShare of mind
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Hypothetical Market Structure
challengerfollower
nichers
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6 types of Defense Strategies
flank
contraction
Preemptive
Counteroffensive
mobile
Positiondefense
attacker
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Optimal Market Share
Probability might fall
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Other Competitive Strategies
Market Followers
Market challengers
Market Nichers
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Market Challengers Strategeties
Define Strategic Objectives and Opponents
Choose a General Attack
Choose a Specific Attack
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Frontal Attack
Flank Attack
Encirclement Attack
Bypass Attack
Guerrilla Attack
General Attack Strategies
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Specific Attack Strategies
Price discount
Product Innovation
Improved Services
Distribution innovation
Manufacturing cost reduction
advertising
Product Proliferation
Value Priced Goods
Value Priced Goods
Prestige Goods
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Counterfeiter
Cloner
Imitator
Adapter
Market Follower Strategies
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End user SpecialistVertical level Customer SizeSpecific CustomerGeographic Product lineJob-shopQuality Price
Niche Specialist Roles
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Service Specialist
Channel Specialist
Niche Specialist Roles
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Competitive Forces
Analyzing competitors
Competitive Strategies for Market
etcOther Competitive Strategies
Balancing Customer and Competitor Orientation
PLAYER as COMPETITION
Mind as Share of mind
Heart as Share of heart
Market as Share of Market
COMPETITIVE STRATEGIES
Shoot as Market Challenger
Pass as Market Nichers
Set Play as Market Followers
http://jeroldsaddi.blogspot.com/
Crafting the Brand Positioning
Jerold I. Saddi
May 3, 2012
http://jeroldsaddi.blogspot.com/
Intro
a. What are the industry concepts of competition?
b. How to analyze competitors?c. How to expand, protect and increase
market share?d. What are the other competitive
strategies?
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Industry Concept of Competition
No. of sellers and degree of differentiation
Entry, mobility, and exit barriersCostVertical integrationGlobalization
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Analyzing Competitors
2 tools on how to analyze competitors
1. Swot Analysis
2. Competitor Matrix
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Strengths and Weaknesses
…maybe attributed in buying a book.
Share of Market
Share of Mind
Share of Heart
Mine bomb
Profit
Shared heart
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Expanding Total Market Demand
a. Look for new customers
b. Increase product usage
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Protecting Market Share
Continuous Innovation
Proactive Marketing
Shield
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Defensive Marketing
…like playing a softball…
a. Position Defenseb. Flank Defensec. Pre-emptive Defensed. Counteroffensive Defensee. Mobile Defensef. Contraction Defense
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Increasing Market Share..like buying a condom..
Factors that need to be considered:
1. The possibility of provoking antitrust action
2. Economic cost
TRUST Condom
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3. The danger of pursuing the wrong marketing activities
4. The effect of increased market share on actual and perceived quality
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Other Competitive Strategies
a. Market Challengerb. Market Followersc. Market Nichers
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Market ChallengersStrategies:
a. Define the strategic objective and opponent(s)
i. Market Leader
ii. Own size
iii. Small local and regional firms
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Choosing a General Attack Strategy
a. Frontal Attackb. Flank Attackc. Encirclement Attackd. Bypass Attacke. Guerrilla Attacks
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Market-Follower Strategies
a. Counterfeiterb. Clonerc. Imitatord. Adapter
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Summary
SWOTCOMPETITOR
MATRIX
Mine bomb
Shared heart
Profit
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Crafting the Brand Positioning
Jerold I. Saddi
May 3, 2012
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