Chapter #9Chapter #9

Nike

Nike Nike Market leader early product innovator outsource Market leader early product innovator outsource

production spend lots of money on marketingproduction spend lots of money on marketing PumaPuma

European stylishEuropean stylish K-SwissK-Swiss

Hip imageHip image VansVans

Niche market Skate boardersNiche market Skate boarders SketchersSketchers

Cool younger marketCool younger market New BalanceNew Balance

Older audience endorsed by no oneOlder audience endorsed by no one AdidasAdidas

Leader in Soccer, recently acquired ReebokLeader in Soccer, recently acquired Reebok Starbury OneStarbury One

Low Price endorsed by Stephan MarburyLow Price endorsed by Stephan Marbury

Early market share leader Early market share leader Share MaintenanceShare Maintenance

Repeat business from current customersRepeat business from current customers Capture new customersCapture new customers

ChallengerChallenger Share growthShare growth

Growth stage often short (8 years)Growth stage often short (8 years)

Opportunities and risks in a Opportunities and risks in a growth marketgrowth market

It is easier to gain share when a market It is easier to gain share when a market is growingis growing

Share gains are worth more in a Share gains are worth more in a growth market than in a mature marketgrowth market than in a mature market

Price competition is likely to be less Price competition is likely to be less intenseintense

Early participation in a growth market Early participation in a growth market is necessary to make sure that the firm is necessary to make sure that the firm keeps pace with the technologykeeps pace with the technology

Gaining Share is EasierGaining Share is Easier

No established preferences/special No established preferences/special needs not yet identifiedneeds not yet identified

Established competitors less likely to Established competitors less likely to act aggressively as long as their act aggressively as long as their growth rate is satisfactory (Dell growth rate is satisfactory (Dell example)example)

Share Gains are worth Share Gains are worth moremore

Can hold share as market growsCan hold share as market grows The existence of positive network The existence of positive network

effectseffects Future changes in technology (hd TV Future changes in technology (hd TV

v v Blue Ray) Ray) Future competitive structure of the Future competitive structure of the

industryindustry Future fragmentation of the marketFuture fragmentation of the market

Early Entry Is Necessary for Early Entry Is Necessary for Technical ExpertiseTechnical Expertise

Stents 5.3 billion in 2006 Stents 5.3 billion in 2006

Johnson & Johnson 1994Johnson & Johnson 1994

Guidant 1997 (70%)Guidant 1997 (70%)

J&J 2003 (huge demand)J&J 2003 (huge demand)

Boston Scientific 2004Boston Scientific 2004

(65% market share)(65% market share)

Market Leaders (retain Market Leaders (retain current customers)current customers)

Maintaining/Improving satisfaction and Maintaining/Improving satisfaction and loyaltyloyalty Improve QualityImprove Quality Selective Product Selective Product modification Better serviceBetter service

Encouraging/simplifying repeat purchasesEncouraging/simplifying repeat purchases DistributionDistribution

Reducing attractiveness of switchingReducing attractiveness of switching Functional barriers to switchingFunctional barriers to switching Compete on PriceCompete on Price

Market Leader (stimulate Market Leader (stimulate selective demand among selective demand among

later adopters)later adopters) Head-to-head positioningHead-to-head positioning

Fighter brandFighter brand Match competitor offering Match competitor offering

(confrontation strategy)(confrontation strategy) Strategic withdrawalStrategic withdrawal

Differentiated PositioningDifferentiated Positioning Market expansionMarket expansion

New linesNew lines New channelsNew channels New messagesNew messages

Followers deciding whom to Followers deciding whom to attackattack

Attack the market-share leaderAttack the market-share leader Frontal or LeapfrogFrontal or Leapfrog

Attack another followerAttack another follower Attack one or more smaller Attack one or more smaller

competitors who have limited competitors who have limited resourcesresources

Avoid direct attacksAvoid direct attacks Flanking (Citrus World)Flanking (Citrus World)