Competing in international markets

Determining Competitive Advantage

Distinctive competences

CompetitionInternal factors External factors

MarketAttractiveness

CompetitiveStrengths

Criticalsuccessfactors

After Dahringer and Muelbacher

Market attractiveness

• Size of total market

• Demand indicators

• Growth

• Structure - oligopolistic, fragmented, gaps?

• Segmentation – needs, purpose, affordability, specialisation

• Political/legal barriers

Competitive strengths

• Technology

• Quality

• Image

• Market focus

• Price

Countering competitorsTerpstra p 171

Three generic strategies - based on Porter

• Low cost producer

• Differentiated products

• Focus – on protected markets– on national loyalty - champions– on under-served segments

Compete or co-operate?

• Value-added chain analysis– where does your distinctive competence lie?

• Use existing distribution and retail networks?

• Offer your product to existing suppliers as an extra part of their range?

Competing in local marketsJohansson (1997)

Mature markets eg Europe, US, Japan

• aim -compete for market share

• identify competitive strengths

• focus on fragmenting specialist tastes– exotic value – brand image– customer satisfaction

New Growth Markets

Eg Latin America, Central Europe

• Aim -participate in growth

• Appeal of foreign products/global brands

• Focus on minority educated middle-class

• Focus on youth markets

Emerging markets

• Africa, Eastern Europe

• aim - develop new market

• first mover advantage

• consider counter-trade - payment in kind to set up networks

• basic low-cost versions

• target small urban elite