Chapter 18: Creating Competitive Advantage
Market Followers
A runner-up firm that wants to hold its share in an industry without rocking the boat.
In the process of analyzing competitors, what should a company do next after identifying competitors?
Assess them
Benchmarking
Comparing the company's products and processes to those of competitors or leading firms in other industries to identify best practices and find ways to improve quality and performance.
Competitive Market Positions and Roles
Leader = 40% Challenger = 30% Follower = 20% Nichers = 10%
Defining competitors as "companies that are trying to satisfy the same customer need or build relationships with the same customer" is using a(n) __________ point of view.
market
Steps in analyzing competitors
1. Identifying the company's competitors 2. Assessing competitors' objectives, strategies, strengths and weaknesses, and reactions patterns 3. Selecting which competitors to attack or avoid
Customer-Centered Company
A company that focuses on customer developments in designing its marketing strategies and delivering superior value to its target customers.
Market-Centered Company
A company that pays balanced attention to both customers and competitors in designing its marketing strategies.
Competitor-Centered Company
A company whose moves are mainly based on competitors' actions and reactions.
Market Nichers
A firm that serves smalls segments that the other firms in an industry overlook or ignore.
What is a strategic group?
A group of firms in an industry following the same or a similar strategy in a given target market.
Strategic Group
A group of firms in an industry following the same or a similar strategy.
Market Challengers
A runner-up firm that is fighting hard to increase its market share in an industry.
Competitive Advantage
An advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices.
Customer Value Analysis
An analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitor's offers.
What is the stage in competitor analysis in which marketing management tries to find out competitors' objectives?
Assessing competitors
"Kodak didn't lose out to competing film makers such as Fuji; it fell to the makers of digital cameras that use no film at all." This statement is a classic example of __________.
Competitor myopia
A tool considered useful for assessing competitor strengths and weaknesses is __________.
Customer value analyses
A winning strategy for competitive positioning in which the company concentrates on creating a product line and marketing program so that it comes across as the class leader in the industry is referred to as __________.
Differentiation
Three stages of marketing strategy and practice
Entrepreneurial Marketing Formulated Marketing Intrapreneurial Marketing
Competitor Analysis
Identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.
Competitors (Industry) vs Competitors (Market)
Industry - See themselves competing in an industry (beverage, pharmaceuticals, etc.) Market - Companies that are trying to satisfy the same customer need or build relationships with the same customer group.
Basic Competitive Strategies / "Value Disciplines"
Overall Cost Leadership (Operational Excellence) - Lowest production & distribution costs Differentiation (Customer Intimacy) - Concentrates on creating differentiated product line and marketing program Focus (Product Leadership) - Serving a few market segments rather than a whole Middle-of-the-Roaders - Firms that do not pursue a clear marketing strategy
Companies such as Walmart and Spirit Airlines offer lower prices than competitors. Which competitive strategy are they using?
Overall cost leadership
What is the key idea in a market nicher strategy?
Specialization
Competitive Marketing Strategies
Strategies that strongly position the company against competitors and give it the greatest possible competitive advantage.
Market Leader
The firm in an industry with the largest market share.
According to the text, what is the best way a market leader can protect its market share position?
Through continuous innovaton
What is the goal of a blue-ocean strategy?
To make competition irrelevant by finding uncontested market spaces
According to the text, it is important that a company design a competitive intelligence system that is __________.
cost effective
Ritz-Carlton focuses on the top 5 percent of corporate and leisure travelers. This represents a(n) __________ strategy.
focus
A company has a(n) __________ orientation when it is not customer-centered and is also not competitor-centered.
product
The most preferred orientation for companies is __________.
to be market oriented
