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Strategic Marketing
Fall 2005Tinker AFB Campus
Chapter EightDealing with the Competition
Competitive Markets andCompetitors
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Market Attractiveness -Porter's FiveForces determine the attractiveness of themarket
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Three of the Porter forces emanate from threatsrelated to competitors: intense segment rivalry,new entrants and substitute products.
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The other two forces respond to threatsconnected to the firm's more immediate marketenvironment: Buyer bargaining power andsupplier bargaining power.
Identifying Competitors -Four levels:brand, industry, form, and generic
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Industry Concept of Competition -Changing with the Internet
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Number of Sellers and Degree of Differentiation(monopoly, oligopoly, monopolistic competition,and pure competition)
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Entry, Mobility, and Exit Barriers
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a) Ease of entry into market and various (existingand new) segments'
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b) Exit and Shrinkage Barriers -Ease of exit andreduction in size. Cost Structure -Reducing largestcosts and most cost efficient plant(s)
 
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Identifying Competitors -Four levels: brand,industry, form, and generic (cont.)
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Degree of Vertical Integration
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Backward and forward
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Integration from source through retail (degreeof)
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Outsourcing to specialists to lower costs
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Degree of GlobalizationIdentifying Competitors -Four levels: brand,industry, form, and generic (cont.)
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Market Concept of Competition
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Many companies make the same product
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Many companies pay attention to othercompanies that satisfy the same customer need.
Competitor Analysis
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Strategies: Strategic groups -differs,depending on various key variables in anindustry.
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Objectives: What drives the competitors -constant monitoring.
 
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Competitor Analysis (cont.)
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Strengths and Weaknesses -competitive positions inthe market:
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Dominant, strong, favorable, tenable, weak, nonviable.
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The basis for evaluation of strengths and weaknesses:
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Share of market
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Share of mind
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Share of heart
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Result: Those that make steady gains in mind andheart share inevitably make gains in market shareand profitability.
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Reaction Patterns
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Depends on competitive equilibrium
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Single factor critical and multiple competitive factors
Competitive Intelligence System
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Designing the Competitive IntelligenceSystem
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Four Main Steps:
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Setting up the system
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Collecting the data
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Evaluating and analyzing the data
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Disseminating information and responding
Competitive Intelligence System(cont.)
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Selecting competitors to attack and to avoid -major stepsin customer value analysis are:
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Customer Value Analysis -Evaluating major attributesthat customers value.
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Assess quantitative importance of the different attributes.
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Assess company and competitor performance on the differentcustomer values against their rated importance.
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Examine how customers in a specific segment rate thecompany's performance against a specific major competitor onan attribute-by-attribute basis.
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Monitor customer values over time.
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