Competition and COMPETITIVE STRATEGIES

Description
The ppt about Competition and Competitive Strategies. It also explains the various competitive strategies along with the help of examples

Determining and taking specific offensive or defensive action to create a defendable position in an industry.
? Specific efforts to please customers ? Offensive and defensive moves

to counter maneuvers of rivals
? Responses to prevailing market conditions ? Initiatives to strengthen its market position

Type of Advantage Sought
Lower Cost Differentiation

Market Target

Broad Range of Buyers

Overall Low-Cost Provider Strategy Best-Cost Provider Strategy

Broad Differentiation Strategy

Narrow Buyer Segment or Niche

Focused Low-Cost Strategy

Focused Differentiation Strategy

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Make achievement of low-cost relative to rivals the theme of firm?s business strategy

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Drive costs out of business year-after-year

Low-cost leadership means low Low-cost leadership means low overall costs, not just low low OVERALL costs, not just manufacturing or production costs! manufacturing or production costs!

A. Value Chain System of Software Developers Using Traditional Wholesale-Retail Channels - Highest Cost
Software development activities CD-ROM production and packaging activities Marketing and promotion of software Warehousing and shipping of wholesalerretailer orders

Technical support activities

Activities of software retailers

Activities of wholesale distributors of software products

B. Value Chain System of Software Developers Using Direct Sales and Physical Delivery of CDs
Software development activities

CD-ROM production and packaging activities

Direct and online marketing and promotion activities

Warehousing and shipping of customer orders

Technical support and customer service activities

C. Value Chain System of Software Developers Using Online Sales and Internet Delivery - Lowest Cost
Software development activities Online marketing and promotion activities Systems to accept credit card payment and allow immediate download Technical support and customer service activities

Objective
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Incorporate differentiating features that cause buyers to prefer firm?s product or service over brands of rivals

Keys to Success
Find ways to differentiate that create value for buyers and that are not easily matched or cheaply copied by rivals ? Not spending more to achieve differentiation than the price premium that can be charged
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Unique taste – Mcdonalds Multiple features – Microsoft Windows and Office Wide selection and one-stop shopping – Amazon.com Superior service – FedEx Spare parts availability – Caterpillar Engineering design and performance – Mercedes and BMW Prestige – Rolex Product reliability – Johnson & Johnson Quality manufacture – Michelin, and Honda Technological leadership – 3M Corporation

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Combine a strategic emphasis on low-cost with a strategic emphasis on differentiation
? Make an upscale product at a lower cost ? Give customers more value for the money

Objectives
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Deliver superior value Low-cost provider

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Aim of a low-cost strategy Intent of a best-cost strategy

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Involve concentrated attention on a narrow piece of the total market

Objective
Serve niche buyers better than rivals

Keys to Success
Choose a market niche where buyers have distinctive preferences, special requirements, or unique needs ? Develop unique capabilities to serve needs of target buyer segment
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eBay ? Online auctions

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Porsche ? Sports cars Jiffy Lube International ? Quick maintenance for motor vehicles

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Customer value analysis(CVA)
? Customer Value= Customer Benefits-

Customer cost
Customer Benefits Customer Costs

Product Service
Personnel Image

Acquisition & Usage Maintenance
Ownership Disposal

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Steps
? Identifying major attributes
? Assess the importance of attributes ? Assess company and competitors

performance ? Rate company performance ? Monitor CV over time

Strong versus weak ? Close versus Distant ? Good versus Bad
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PARTNERSHIP Business entity in which partners (owners) share with each other the profits or losses of the business undertaking in which they have invested

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STRATEGIC ALLIANCE Formal relationship formed between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations

MERGER combination of two companies into a larger company ? ACQUISITIONS Also known as a takeover, is the buying of one company (the „target?) by another
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Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company ? Offshoring ? Nearshoring
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First-mover advantage is the advantage gained by the initial occupant of a market segment Charles Stack Online Bookstore

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Define Market leader :
?Firm having the largest share in the

relevant product market. ?Usually leads the others ?Microsoft (computer software), Xerox(copying), P&G(consumer goods)

Market leader Strategies

Expand the total market demand

Protect the current market share

Increase market share

Expand the total market demand
New Users

New Uses

More Usage of products

New Users
Market-penetration strategies

New-market segment strategies

Geographical-expansion strategy

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Strategies for the New Uses: ? Discovery of new uses of the same product. Strategies for the more usage of product: ? Convincing consumers to use product more regularly.
? Planned Obsolescence

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Market share
Possibility of provoking antitrust

Economic Cost

Pursuing wrong marketing activities

Position defense

Mobile defense Defense strategies Flank defense
Contraction defense

Counteroffensive defense

Pre-Emptive defense

Market Challenger – A runner-up firm in an industry that is fighting hard to increase market share
• Attack

leader • Operate in conjunction with competitors and be Market Followers • Define their position and strategic objective • The company must have a clearly defined and attainable objective

Frontal Attack ? Flanking Attack ? Encirclement Attack ? Bypass Attack ? Guerrilla Attack
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Price Discount ? Lower Price goods ? Prestige goods ? Product Proliferation ? Product Innovation ? Improved Services ? Distribution Innovation ? Intense Advertising Promotion ? Manufacturing-cost reduction
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Definition
A firm that is happy to follow the leaders in a market place without challenging them, perhaps taking advantages of opportunities created by leaders without the need for much marketing investment of its own.

Classification
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Imitator ? Counterfeiter ? Adapter ? Cloner

An alternative to being a follower in a large market is to be a leader in a small market, or niche. ? Firms with low shares of the total market become highly profitable through smart niching.
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Creating niches ? Expanding niches ? Protecting niches
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A firm should “stick to its niching” but not necessarily its niche.

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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

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Competitor Orientation
Positive side
? Fighter orientation ? Constant watch for competitor weakness

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Negative side
? Too reactive ? Company doesn?t move towards its own goals

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Customer Orientation
Positive side
? Better position to identify new opportunities ? Long-run profits

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Negative side
? Marketing myopia

QUESTIONS?



doc_290705548.pptx
 

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