6: Competitive Strategy

Steps in analyzing competitors

*Identifying* the company's competitors *Assessing* competitors' objectives, strategies, strengths, and weaknesses, and reaction patterns *Selecting* which competitors to attack or avoid

Competitive advantage

An advantage over competitors gained by offering consumers *greater value*, either through *lower prices* or by providing *more benefits* that justify higher prices.

Market nicher strategies

By customer, market, quality, price, service Multiple niching

Market follower strategies

Follow closely Follow at a distance

Market challenger strategies

Full-frontal attack Indirect attack

MARKETING

A *Social* [*MacroMK*] and *Managerial* [*MicroMK*] *Process* by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

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

A company that tries to *be better* than others From the *Industry* point of view (*Product*) a) Producing and Marketing the same *product/ category* b) Delivering the same *core benefit* to Customers (satisfying the same *need*) From the *Market* point of view (*Product/Consumer*) c) Capturing the same *consumers'* money (*Share of Wallet*)

Competitor-centered company

A company whose moves are mainly based on competitors' actions and reactions.

Market nicher

A firm that serves small segments that the other firms in an industry overlook or ignore.

Strategic group

A group of firms in an industry following the same or a similar strategy.

Market challenger

A runner-up firm that is fighting hard to increase its market share in an industry.

Market follower

A runner-up firm that wants to hold its share in an industry without rocking the boat.

Customer value analysis

An analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers.

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. The process of *comparing the company's products and processes to* those of competitors or *leading firms* in other industries to find ways to improve quality and performance.

Competitive strategies - Approaches

Entrepreneurial marketing *Formulated marketing* Intrapreneurial marketing

Approaches to marketing strategy and practice often pass through three stages:

Entrepreneurial marketing Formulated marketing Intrapreneurial marketing

Market leader strategies

Expand total market Protect market share Expand market share

Competitor analysis

Identifying key competitors; assessing their objectives, strategies, strengths, and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.

Strategies by market leadership role

Leaders: - Expand market, - Protect market share, - Expand market share Challenger: - Full frontal attack, - Indirect attack Follower: - Follow closely, - Follow at a distance Nicher: - Target by customer, - ...market, - ...quality-price, service...

Companies can pursue any of three strategies - called *value disciplines* - for delivering superior customer value:

Operational excellence Customer intimacy Product leadership

Competitive Strategies: Value disciplines

Operational excellence Customer intimacy Product leadership

Basic competitive positioning strategies that companies can follow:

Overall cost leadership Differentiation Focus

Competitive strategies Porter's Model

Overall cost leadership Differentiation Focus

Competitive marketing strategies

Strategies that strongly position the company against competitors and give it the greatest possible competitive advantage.

Selecting competitors to attack and avoid

Strong or weak? As per customers' evaluation (Value Analysis) Close or distant? Per Market Offering Similarity Good or bad? Per their Values, Practices and Risk-Taking

Market leader

The firm in an industry with the largest market share.