Dealing with the Competition

ผู้��ช่�วยศาสตราจารย� ดร. ธนส�ว�ทย� ท�บหิ�ร�ญร�กษ์�

DBA. Argosy University (USA)MBA. National University (USA)

Cert: Kellogg School of Management (USA)

Induce your competitors not to invest in those Induce your competitors not to invest in those products, markets and services where you products, markets and services where you expect to invest the most … that is the expect to invest the most … that is the fundamental rule of strategy.fundamental rule of strategy.

Bruce Henderson, Founder of BCGBruce Henderson, Founder of BCG

There is nothing more exhilarating than to be There is nothing more exhilarating than to be shot at without result.shot at without result.

Winston ChurchillWinston Churchill

Five Forces Determining Segment Five Forces Determining Segment Structural AttractivenessStructural Attractiveness

Barriers and ProfitabilityBarriers and Profitability

Low, stablereturnsLowLow

High, stablereturnsHighHigh

LowLow

Low, riskyreturns

High, riskyreturns

HighHigh

En

try

Bar

rier

sE

ntr

y B

arri

ers

Exit barriersExit barriers

Industry Concept of Competition1. Number of Sellers and Degree of Differentiation

Pure monopolyOligopoly

– Pure oligopoly– Differentiated oligopoly

Monopolistic competitionPure competition

Industry concept of competitionIndustry concept of competition

2. Entry, Mobility, Exit BarriersEntry barriersMobility barriersExit barriers

3. Cost Structure

4. Degree of Vertical IntegrationVertical integration

5. Degree of Globalization

Market Concept of Competition

Analyzing CompetitorsAnalyzing Competitors

CompetitorCompetitorActionsActions

ObjectivesObjectives

Strengths &Strengths &WeaknessesWeaknesses

ReactionReactionPatternsPatterns

StrategiesStrategies

Figure : A Competitor’s Expansion Plans

Determining competitors’ objective

Strengths and Weaknesses– Dominant– Strong– Favorable– Tenable– Weak– Nonviable

Assessing the competitor’ strengths ans weaknesses

Table : Customer’s Ratings of Competitors on Key Table : Customer’s Ratings of Competitors on Key Success FactorsSuccess Factors

Customer Awareness

Product Quality

Product Availability

Technical Assistance

Selling Staff

Competitor A E E P P G

Competitor B G G E G E

Competitor C F P G F F

Note: E = excellent, G = good, F = fair, P = poor.

Estimating competitor’s reaction patterns

Laid-back competitor

Selective competitor

Tiger competitor

Sochasticcompetitor

Reactionpatterns

Designing The Competitive Designing The Competitive Intelligence SystemIntelligence System

Disseminating and Responding

Setting Up the System

Collecting the Data

Evaluating and Analyzing the Data

Selecting competitors to Selecting competitors to attack and avoidattack and avoid

Customer Value Analysis (CVA)Customer Value Analysis (CVA) Alternative of selecting competitorsAlternative of selecting competitors

Strong versus weakStrong versus weak Close versus distantClose versus distant Good and badGood and bad

Competitive positionsCompetitive positions

Market leader

Market challenger

Market follower

Market nicher

Hypothetical Market Structure Hypothetical Market Structure & Strategies& Strategies

40%

Marketleader

30%

Marketchallenger

20%

Marketfollower

Expand MarketDefend Market Share

Expand Market Share

Attack leaderStatus quo

Imitate

10%

Marketnicher

Special-ize

Market Leader Strategies

1. Expanding the Total Market New Users

– Market-penetration strategy

– New-market segment strategy

– Geographical-expansion strategy New Uses More Usage

2. Defending Market Share

3. Expanding market share

Defense StrategiesDefense Strategies

ตั�วอย่�างกลย่�ทธ์�การป้�องก�น : The pizza company

กลย่�ทธ์� ว�ธ์�ดำ�าเน�นการ

1. Position defense

มี�หลากหลาย่เมีน�ให�เล�อกร�บป้ระทาน ไมี�เพี�ย่งแตั�เฉพีาะพี�ซซ�าเท�าน�&น ย่�งมี�

ลาซานญ่�า พีาสตั�า ป้)กไก�ย่�าง ไอศคร�มี

2. Flank defenseพี�ซซ�ามี�ให�เล�อกหลากหลาย่หน�า

เพี�,อป้�องก�นค��แข่�งข่�น

กลย่�ทธ์� ว�ธ์�ดำ�าเน�นการ

4. Counteroffensive defense

กระจาย่สาข่าไดำ�จ�านวนมีาก โดำย่เฉพีาะสาข่าย่�านชานเมี�อง ท�าให� delivery

ไดำ�ท�,วถึ2ง และรวดำเร3ว รวมีถึ2งการจ�ดำก�จกรรมีส�งเสร�มีการข่าย่ตั�อเน�,อง

5. Mobile defenseเดำอะพี�ซซ�า มี�การพี�ฒนาพี�ซซ�าหน�า

ใหมี�ๆ อย่�างตั�อเน�,อง

6. Contraction defenseเดำอะพี�ซซ�า มี�ไดำ�ตั�ดำ (ลดำ ) บางเมีน�ท�,ไมี�ท�าก�าไร เช�น เมีน�ท�,มี�ส�วนผสมีเป้7นเน�&อ

3. Preemptive defense

กระจาย่สาข่าไดำ�จ�านวนมีาก โดำย่เฉพีาะสาข่าย่�านชานเมี�อง ท�าให� delivery

ไดำ�ท�,วถึ2ง และรวดำเร3ว

Optimal Market ShareOptimal Market SharePro

fita

bili

ty

Market share0% 25% 50% 75% 100%

Optimal market share

1. Defining the Strategic Objective and Opponent(s)Attack the market leaderAttack firms of its own size Attack small local and regional firms

2. Choosing a General Attack Strategy

Market Challenger Strategies

(3) Encirclement attack

Attack StrategiesAttack Strategies

AttackerDefender

(4) Bypass attack

(2) Flank attack

(5) Guerilla attack

(1) Frontal attack

Specific Attack StrategiesSpecific Attack Strategies Price-discount Cheaper goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing cost reduction Intensive advertising promotion

กลย่�ทธ์� ว�ธ์�ดำ�าเน�นการ

1. Frontal attack

มี�การท��มีงบการโฆษณาป้ระชาส�มีพี�นธ์�อย่�างมีาก รวมีถึ2งการจ�ดำก�จกรรมีส�งเสร�มีการข่าย่ตั�างๆ และออกหน�าพี�ซซ�าใหมี�ๆ

เช�นเดำ�ย่วก�นเดำอะพี�ซซ�า

2. Flank attack

พี�ฒนาพี�ซซ�าหน�าใหมี� “ไลท� พี�ซซ�า” เป้7นพี�ซซ�าท�,ก�นแล�วไมี�หน�กท�องเก�นไป้

เป้7นเมีน�ท�,เดำอะพี�ซซ�าไมี�มี�

ตั�วอย่�างกลย่�ทธ์�การโจมีตั� :

Pizza Hut

กลย่�ทธ์� ว�ธ์�ดำ�าเน�นการ

3. Encirclement attackมี�การแข่�งข่�นก�ย่เดำอะพี�ซซ�า โดำย่ออก

หน�าพี�ซซ�าเหมี�อนก�บเดำอะพี�ซซ�า

4. Bypass attackพีย่าย่ามีข่ย่าย่ตั�วไป้ส��ตัลาดำใหมี�มีากข่2&น

เช�น แหล�งท�องเท�,ย่วตั�างจ�งหว�ดำ

5. Guerrilla attackป้ล�อย่ข่�าวล�อ ตั�ดำราคา แย่�งเอเย่�นตั�(Pizza Hut ไมี�ไดำ�ใช�กลย่�ทธ์�น�& )

Four Broad Strategies:

1. Counterfeiter

2. Cloner

3. Imitator

4. Adapter

Market Follower Strategies

NIKE

NIKE

End-user specialist Vertical-level specialist Customer-size specialist Specific-customer specialist Geographic specialist Product or product-line specialist Product-feature specialist Job-shop specialist Quality-price specialist Service specialist Channel specialist

Market Niches Strategies