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
?
Make achievement of low-cost relative to rivals the theme of firm?s business strategy
?
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
?
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
?
?
?
? ? ?
?
? ? ?
?
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
8
?
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
? ?
Deliver superior value Low-cost provider
? ?
Aim of a low-cost strategy Intent of a best-cost strategy
?
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
?
?
eBay ? Online auctions
?
?
Porsche ? Sports cars Jiffy Lube International ? Quick maintenance for motor vehicles
12
?
Customer value analysis(CVA)
? Customer Value= Customer Benefits-
Customer cost
Customer Benefits Customer Costs
Product Service
Personnel Image
Acquisition & Usage Maintenance
Ownership Disposal
?
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
?
?
PARTNERSHIP Business entity in which partners (owners) share with each other the profits or losses of the business undertaking in which they have invested
?
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
?
Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company ? Offshoring ? Nearshoring
?
?
?
First-mover advantage is the advantage gained by the initial occupant of a market segment Charles Stack Online Bookstore
?
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
?
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
?
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
?
Price Discount ? Lower Price goods ? Prestige goods ? Product Proliferation ? Product Innovation ? Improved Services ? Distribution Innovation ? Intense Advertising Promotion ? Manufacturing-cost reduction
?
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
?
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.
?
Creating niches ? Expanding niches ? Protecting niches
?
A firm should “stick to its niching” but not necessarily its niche.
?
?
? ? ?
?
? ? ? ? ?
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
?
?
Competitor Orientation
Positive side
? Fighter orientation ? Constant watch for competitor weakness
?
Negative side
? Too reactive ? Company doesn?t move towards its own goals
?
?
Customer Orientation
Positive side
? Better position to identify new opportunities ? Long-run profits
?
Negative side
? Marketing myopia
QUESTIONS?
doc_290705548.pptx
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
?
Make achievement of low-cost relative to rivals the theme of firm?s business strategy
?
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
?
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
?
?
?
? ? ?
?
? ? ?
?
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
8
?
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
? ?
Deliver superior value Low-cost provider
? ?
Aim of a low-cost strategy Intent of a best-cost strategy
?
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
?
?
eBay ? Online auctions
?
?
Porsche ? Sports cars Jiffy Lube International ? Quick maintenance for motor vehicles
12
?
Customer value analysis(CVA)
? Customer Value= Customer Benefits-
Customer cost
Customer Benefits Customer Costs
Product Service
Personnel Image
Acquisition & Usage Maintenance
Ownership Disposal
?
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
?
?
PARTNERSHIP Business entity in which partners (owners) share with each other the profits or losses of the business undertaking in which they have invested
?
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
?
Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company ? Offshoring ? Nearshoring
?
?
?
First-mover advantage is the advantage gained by the initial occupant of a market segment Charles Stack Online Bookstore
?
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
?
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
?
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
?
Price Discount ? Lower Price goods ? Prestige goods ? Product Proliferation ? Product Innovation ? Improved Services ? Distribution Innovation ? Intense Advertising Promotion ? Manufacturing-cost reduction
?
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
?
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.
?
Creating niches ? Expanding niches ? Protecting niches
?
A firm should “stick to its niching” but not necessarily its niche.
?
?
? ? ?
?
? ? ? ? ?
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
?
?
Competitor Orientation
Positive side
? Fighter orientation ? Constant watch for competitor weakness
?
Negative side
? Too reactive ? Company doesn?t move towards its own goals
?
?
Customer Orientation
Positive side
? Better position to identify new opportunities ? Long-run profits
?
Negative side
? Marketing myopia
QUESTIONS?
doc_290705548.pptx