Upload
sunil-singh
View
174
Download
4
Tags:
Embed Size (px)
Citation preview
DEALING WITH COMPETITION
Presented by:Feroz Khan
Shilpa SharmaShiva Suresh Sonti
Sunil Singh
In this chapter, we will address the following questions:
• 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 defend market share?• How should market challengers attack market
leaders?• How can market followers or nichers compete
effectively?
What is competition?
Open market rivalry in which every seller tries to get what other sellers are seeking at the same time-sales, profit, and market share by offering the best practicable combination of price, quality, and service. Where the market information flows freely, competition plays a regulatory function in balancing demand and supply.
Competitive forces
Identifying competitors
Analyzing competitors• Strategic group: A group of firms following the same
strategy in a given target market.
Objectives
• To know what competitors are seeking in the market place.
• To know each competitors behavior.• To know whether the parent company is
running its division for growth or profit.• To know the expansion plans of the
competitors.
Competitor’s expansion plans
Porters 5 forces model
SWOT ANALYSIS
SWOT ANALYSIS
• Tool for Auditing an organization and its environment
• Help to focus on key issues• Strength could be-Any aspect of business which adds value to
product and serviceNew productInnovative product
Continued…….
Location of businessQuality processes • Weaknesses could be-Lack of marketing expertise.Undifferentiated products or services (i.e. in
relation to your competitors).Location of your business.Poor quality goods or services.
• An opportunity could be-A developing market such as the Internet.Mergers, joint ventures or strategic alliances.Moving into new market segments that offer
improved profits.A new international market.A market vacated by an ineffective competitor.
• A threat could be-A new competitor in your home market.Price wars with competitors.A competitor has a new, innovative product or
service.Competitors have superior access to channels of
distribution.Taxation is introduced on your product or service.
Strengths and Weaknesses
SWOT HELPS TO KNOW:-
• Company position• Market value• Method of sales distribution• Product • Brand• Business idea• Opportunity to make an acquisitions
Contd..
• Monitor 3 variables when analyzing competitors:1. Share of market2. Share of mind3. Share of heart
SWOT Analysis
Selecting competitors
• Strong versus Weak• Close versus Distant• Good versus Bad
Selecting customer
Strategies for Market LeadersMarket Leader’s objectives:• Expand the total market by– Finding new users– Creating new uses
• Protect its current market share by– Adopting defense strategies (see following slides)
Defending Market Share
• A market leader should generally adopt a defense strategy
. Six types of defense strategies:
Defensive Strategies of Market Leaders
1. Position Defense Strategy: allocating important efforts to support the firm’s brands (without developing new ones).
ex: Nescafe
Nescafe
2. Flank Defense Strategy: rapid response to competitors’ moves as a result of Competitive Intelligence.
ex: Smironoff vodka.
3. Preemptive Defense Strategy: the best defense is (pre) attack.
Ex: SBI.
4. Counter Offensive Strategy: entering the core business activities of the competition as a defensive mean.
Ex: Hero Honda Pleasure.
5. Mobile Defense Strategy: penetrating new (niche) markets or diversifying inorder to better prepare upcoming defense strategies.
Ex: Bharath petroleum and ITC.
6. Contraction Defense Strategy: reducing products and concentrating on remaining products.
Ex: TVS
Other Competitive Strategies
• Market challenger strategies:The market challengers’ strategic objective is to
gain market share and to become the leader eventually
How?• By attacking the market leader• By attacking smaller & regional firms
Tapal Danedar Tea
Contd..
• Choosing a general attack strategy– Frontal attack– Flank attack– Bypass attack– Guerrilla attack
• Choosing a specific attack strategy
Amul Masti Dahi
Amul Kool
Woodland Shoe
Nintnendo’s Video game
Market-Follower Strategies• Theodore Levitt in his article, “Innovative Imitation”
argued that a product imitation strategy might be just as profitable as a product innovation strategye.g. Product innovation--SonyProduct-imitation—Panasonic
• Counterfeiter• Cloner• Imitator• Adapter
Market-Nicher Strategies• Smaller firms can avoid larger firms by targeting
smaller markets or niches that are of little or no interest to the larger firmse.g. Logitech—mice, Reva electrical cars
Microbrewers--special beers• Nichers must create niches, expand the
niches and protect them– E.g. Digicel Group
• What is the major risk faced by nichers?– Market niche may be attacked by larger firms once
they notice the niches are successful
Nutralite
Balancing Customer and Competitor Orientations
• E.g. Wal-Mart
Competitor-Centered companies
Customer-Centered companies
(Amazon.com)
THANK YOU