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Session 19 :Dealing with Competition

Theme : 6

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In businessthe competition will bite you if you keep

runningif you stand still they will swallow you.

Victor Kiam

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Gil Atkinson

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Balancing Orientations

Competitor-Centered

Customer-Centered

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Five Forces Determining Segment Structural

Attractiveness (PORTERS DIAMOND FRAMEWORK)

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Five Forces Determining Segment Structural

Attractiveness

1. Industry competitors

2. Threat of Potential

entrant3. Bargaining power of

Suppliers

4. Bargaining Power of

Buyers5. Threat of Substitutes

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Industry Concept of

Competition Number of sellers and degree of differentiation

Entry, mobility, and exit barriers

Cost structure Degree of vertical integration

Degree of globalization

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Analyzing Competitors

Competitor

Actions

Objectives

Strengths &

Weaknesses

Reaction

Patterns

Strategies

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A Competitors Expansion Plans

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Strengths and Weaknesses

Share of market

Share of mind

Share of heart

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Market Share, Mind Share, and Heart Share

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Expanding the Total Market

New customers

More usage

http://www.armhammer.com/

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Industry Concept of Competition

Marketers classify industry according to.

1. Number of sellers and degree of differentiation

2. Entry, mobility, and exit barriers

3. Cost structure4. Degree of vertical integration

5. Degree of globalization

An industry is a group of firms that offer a productor class of products that are close substitutes forone another

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Once a company identifies its primary competitors, it

must ascertain their strategies , objectives , strengths

and weaknesses.

A group of firms following the same strategy in a giventarget market is a STRATEGIC GROUP

Once a company has identified its main competitorsand their strategies , it must ask:

1. What is each competitor seeking in the market?

2. What drives each competitors behavior?

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Strengths and Weaknesses of competitors

Share of market- the competitors share of targetmarket

Share of mind- the percentage of customers whonamed the competitor in responding to the statement,

Name the first company that comes to mind in thisindustry

Share of heart- The percentage of customers whonamed the competitor in responding to the statement,

Name the company from which you would prefer tobuy the product

Companies that make steady gains in mind share andheart share will inevitably make gains in market share

and profitability

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Benchmarking

To improve market sharemany companiesbenchmark their mostsuccessful competitors aswell as other world classperformers.

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Steps in BenchmarkingI. Determine which functions or processes to

benchmark

II.Identify the key performance variables to measureIII. Identify the best-in-class companies

IV. Measure the performance of best-in-class companies

V. Measure the companys performance

VI. Specify programs and actions to close the gap

VII. Implement and monitor results

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Strategy to Remain No. 1 Staying the number one firm calls for action on three

fronts.

1.First, the firm must find ways to expand total marketdemand.

2. Second , the firm must protect its current marketshare through good defensive and offensive

strategies.3. Third the firm can try to increase its market share

even if its market size remains constant.

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Expanding the Total Market New customers

More usage

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Six Types of Defense Strategies

1. Position Defense

2. Flank Defense

3. Preemptive Defense(preannouncements/vaporware)

4. Counteroffensive Defense

5. Mobile Defense ( market broadening/ marketdiversification)

6. Contraction Defense ( strategic withdrawal)

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Six types of defense strategies

ATTACKER(3) PREEMPTIVE

(4) COUNTEROFFENSIVE

(1) POSITION

DEFENDER

(6) CONTRACTION

(5) MOBILE

(2) FLANK

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Factors Relevant to Pursuing Increased

Market Share

Possibility of provoking antitrust action

Economic cost

Pursuing the wrong marketing-mix strategy The effect of increased market share on actual and

perceived quality

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Other Competitive StrategiesMarket challengers

Market followers

Market nichers

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Market Challenger Strategies1. Define the strategic objective and opponents

It can attack the market leader

It can attack firms of its own size that are not doingthe job and are underfinanced

It can attack small local and regional firms

2. Choose a general attack strategy

3. Choose a specific attack strategy

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Balancing Orientations Competitor-centered

Customer-centered

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REFERENCES

Marketing Management,Thirteen edition, A SouthAsian Perspective. PhilipKotler, Kevin lane Keller,Abraham Koshy,Mithileshwar Jha.

http://studygalaxy.com/