creating competitive advantage.ppt

8/10/2019 creating competitive advantage.ppt

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Creating

CompetitiveAdvantage


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Has dominated thechip industry

Success is directlyrelated to Intelscompetitivestrategy

Strategy focuseson superior valueand productleadership

Heavy focus onproduct and

advertising innovationand R&D investments

Changing marketneeds have

challenged Intel toadapt

Intel is capitalizing onthe Internet now

c

Intel


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Two Major Goals ofMarketing*

1. Design and Manage a SuperiorValue-Delivery System to Reach

and Satisfy Target CustomerSegments.

2. Gain and Sustain CompetitiveAdvantage.


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-

=

Total Customer

Benefit

Total Customer

Cost

(Prod uc t, Service,

Personnel, &

Image Values)

(Monetary, Time,

Energy, &Psychic Cos ts)

Customer

Delivered Value

(Prof i t to the

Consumer)

Defining Customer Value


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Value Chain Analysis**

Firm InfrastructureHuman Resource Management

Technology Development

Procurement

Inbound

LogisticsOperations

Outbound

Logistics

Marketing

and

Sales

Service

Support Activities

Primary Activities


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Customer Value-Delivery Network*

Customer (you)

Retailer (Sears)

Producer (Levi)

Vendor (Milliken)

Raw Material

Supplier (Du Pont)

DeliveryO

rder

Order

Order

Order

Orde

r

Delivery

Delivery

Delive

ry

D

elivery


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Definition

Competitive Advantage

An advantageover competitorsgained by offeringconsumers greater

value thancompetitors offer.


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Figu re 18-1:

Steps in AnalyzingCompetitors*


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Competitor Analysis

Firms face a widerange of competition

Be careful to avoidcompetitor myopia

Methods ofidentifying

competitors: Industry point-of-view

Market point-of-view

Ident i fy ingCompet i tors

Assess ing

Compet i torsSelect ingCompet itors toAt tack or Avoid

Steps in theProcess:


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Levelsof Competition

Diet

lemon

limes

Baseball

cards

Fruit

flavore

d colas

Coffee

Diet

Coke

Diet

Pepsi

Diet-Rite

cola

Bottledwater

Lemon

limes

Regular

colas

Beer

Juices

Wine

Fast food

Tea

Video

rentals

Ice

cream

Product form

competition:

Diet colas

Product

category

competition:Soft drinks

Generic

competition:

BeveragesBudget

competition:

Food and

entertainment


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230-year-old

Encyclopedia

Bri tannica

viewed its elf as

compet ing w i th

other pub l ishers

of p r inted

encyclopedias.

Big m istake! Its

real compet i torswere so ftware

encyclopedias

and the Internet.


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Create a levels of

competition diagramfor one of the

following: WalMart

McDonalds Nike

Starbucks

Google

Discussion Question


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Competitor Analysis

Determiningcompetitors objectives

Identifying competitors

strategies Strategic groups

Assessing competitorsstrengths andweaknesses Benchmarking

Estimating competitorsreactions


Assess ing




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Competitor Analysis

Strong or weakcompetitors Customer value analysis

Close or distantcompetitors Most companies compete

against close competitors

Good or Bad

competitors The existence of

competitors offers severalstrategic benefits


Assess ing




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Customer Value Analysis (forCompetition)

Identify Attributes Customers Value

Assess Attribute Importance

Assess Company and CompetitorPerformance

Examine Segments on Attribute-by-

Attribute BasisMonitor Customer Values Over Time


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Attractiveness of an Industry

Existing

Rivalry

Threat of

Potential Entrants

Threat of

Substitutes

Bargaining

Power of

Suppliers

Bargaining

Power of

Buyers


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Hohner has

successfu l ly

implemented a

focus strategy tocaptu re an 85%

share of the

harmonica

market.


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Basic Competitive Strategies:Value Disciplines* Operational excellence

Superior value via price and convenience

Customer intimacy

Superior value by means of building strong

relationships with buyers and satisfyingneeds

Product leadership

Superior value via product innovation

Competitive Strategies


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Firms that follow a

customer intimacystrategy are willing to

do almost anything for

their customers.

Does such a strategymake sense for local

businesses, or only for

national / global

corporations?

Discussion Question

Bri t ish Airways pract ices cus tomer int imacy

with select frequent f lyers


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Figu re 18-3:

HypotheticalMarket Structure


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Competitive Strategy

Expanding the totaldemand Finding new users

Discovering andpromoting new productuses

Encouraging greaterproduct usage

Protecting market share

Many considerations Continuous innovation

Expanding market share Profitability rises with

market share

Market Leader

MarketChal lenger

MarketFol lower

Market Nicher

CompetitivePositions


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WD-40 has a knack

for developing new

uses for its product.What other brands

have adopted a

similar strategy?

WD40
http://www.wd40.com/


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Option 1:challenge themarket leader High-risk but high-gain

Sustainable competitiveadvantage over the leaderis key to success

Option 2:challenge firmsof the same size, smaller

size or challengeregional or local firms

Full frontal vs. indirectattacks

Market Leader

MarketChal lenger

MarketFol lower

Market Nicher



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Peps i is an

example of

market

chal lenger

that has

chosen to use

a fu l l fron talattack


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Follow the marketleader Focus is on improving

profit instead ofmarket share

Many advantages:

Learn from the

market leadersexperience

Copy or improve onthe leaders offerings

Strong profitability

Market Leader

MarketChal lenger

MarketFol lower

Market Nicher



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Dial Corporat ion

successfu l ly

uses a market

fol lower strategy


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Serving marketniches meanstargeting

subsegmentsGood strategy forsmall firms withlimited resources

Offers high marginsSpecialization is key By market, customer,

product, or marketingmix lines

Market Leader

MarketChal lenger

MarketFol lower

Market Nicher



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FedEx and

UPS are two

compet i torsin the

package

del ivery

business.What

compet i t ive

strategy

seems to

descr ibe

each

company?


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Companies can become socompetitor centered that theylose their customer focus.

Types of companies:

Competitor-centered companies Customer-centered companies

Market-centered companies

Balancing Customer and

Competitor Orientations


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Monopolist

CooperativeApproach

Competitive

Approach

Co-opetition

Latest thinking onCompetition

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creating competitive advantage.ppt