Marketing Management Competitive Threats Paul Dishman, Ph.D. Department of Business Management...

Marketing Management

Competitive Threats

Paul Dishman, Ph.D.Department of Business Management

Marriott School of Management

Brigham Young University

Lecture 20

Paul Dishman, Ph.D.

Marketing Management

Western Approach to Strategy

• Find Strengths to Match Opportunities

• “The most profitable match of company strengths with opportunities presented by the marketplace which would provide long-term advantage.”

Paul Dishman, Ph.D.

Marketing Management

Porter’s Model

• Competitive Advantage: Creating and Sustaining Superior Performance, Michael E. Porter, Free Press, 1985

Paul Dishman, Ph.D.

Marketing Management

Porter’s Model

Competitive Advantage

CompetitiveScope

BroadTarget

Lower Cost

NarrowTarget

Differentiation

1. Cost Leadership 2. Differentiation

3A. Cost Focus 3B. DifferentiationFocus

Paul Dishman, Ph.D.

Marketing Management

Kotler Model

• Market Leader

• Market Challenger

• Market Follower

• Market Nicher

Kotler, 1996

Paul Dishman, Ph.D.

Marketing Management

Market Leader Strategies

• Expanding the Total Market– New Users– New Uses– More Usage

• Protecting Market Share

Paul Dishman, Ph.D.

Marketing Management

Protecting Market Share

• Position Defense

• Flanking Defense

• Preemptive Defense

• Counteroffensive Defense

• Contraction Defense

Paul Dishman, Ph.D.

Marketing Management

Position Defense

X X X X X X X

O O O O O O O

X X

Paul Dishman, Ph.D.

Marketing Management

Flanking Defense

X X X X X X X

O O O O O O O

X X

Paul Dishman, Ph.D.

Marketing Management

Preemptive Defense

X X X X X X X

O O O O O O O

X X$

<- Distributors

Paul Dishman, Ph.D.

Marketing Management

Counteroffensive Defense

X X X X X X X

O O O O O O O

X X

Paul Dishman, Ph.D.

Marketing Management

Contraction Defense

Paul Dishman, Ph.D.

Marketing Management

Market Challenger Strategies

• Frontal Attack

• Flanking Attack

• Encirclement Attack

• Bypass

• Guerrilla Attack

Paul Dishman, Ph.D.

Marketing Management

O O O O O O O

Frontal Attack (Pepsi to Coke)

X X X X X X X

X X

Paul Dishman, Ph.D.

Marketing Management

Flanking Attack

X X X X X X X

O O O O O O O

X X

O O O

Paul Dishman, Ph.D.

Marketing Management

X X X X X X X

O O O O O O O

X X

O O O

Encirclement Attack

Paul Dishman, Ph.D.

Marketing Management

Bypass (Canon)

X X X X X X X

O O O O O O O

Xerox X

O O O O

O

Paul Dishman, Ph.D.

Marketing Management

Guerrilla Attack (Formula 409)

Paul Dishman, Ph.D.

Marketing Management

Market Follower Strategies

• Cloner- Imitator- Adapter

Paul Dishman, Ph.D.

Marketing Management

Market Nicher Strategies

• Low Volume, High Margin

• Specialization– End-Use– Vertical-Level– Customer-size– Specific-customer– Geographic– Product or feature– Quality-price– Service

Paul Dishman, Ph.D.

Marketing Management

Treacy & Wiersema Model

• The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, Michael Treacy & Fred Wiersema, Addison-Wesley, 1995

Paul Dishman, Ph.D.

Marketing Management

Treacy & Wiersema Model

• Operational Excellence

• Product Leadership

• Customer Intimacy