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Competitive Strategies.ppt

Competitive Strategies.ppt

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Published by Munnira Sheikh
Companies strategies to compete
Companies strategies to compete

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Published by: Munnira Sheikh on Apr 22, 2013
Copyright:Attribution Non-commercial


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Competitive Strategies

Strategic Marketing

Who are Competitors?
Natural Competitors  Resource Competitors  Substitute Providers

Natural Competitors
Two or more firms in the same strategic group, making homogenous (similar) products, targeting the same customer groups  Examples: Life Buoy, Safe Guard, & Dettol anti-bacterial soaps  Jazz, Ufone, Zong pre-paid packages

Resource Competitors
Marketing offers in the same industry which may promise different benefits, yet end up creating win-lose situations for each other, and hence competing for similar resources  Examples: Google and Face Book  A news channel versus an entertainment channel

Where products are different yet market offerings (benefits) overlap  Examples: Petrol and CNG for car owners  Tea versus Coffee

Strategies for dealing with Competition
Aggressive Strategies  Defensive Strategies  Follower Strategies

Aggressive Strategies
Frontal attack  Encirclement attack  Bypass (Leapfrog) attack  Flanker Attack  Guerilla warfare

Frontal Attack

This is a direct head-on assault. It usually involves marshaling all your resources including a substantial financial commitment. All parts of your company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors’ line where it is strong.

Examples: Zong, Olpers

Frontal Attack is recommended when:
the market is relatively homogeneous  brand equity is low  customer loyalty is low  products are poorly differentiated  the attacker enjoys strong resources

Encirclement Attack
This is a broader but subtle offensive strategy. It involves encircling the targeted competitor. This is done by introducing a range of products that are similar to the competitor’s products. Each product will liberate some market share from the competitor, with the objective of leaving it weakened, demoralized, and in a state of siege  Omore (against Walls); Toyota (against Ford & GM); Q-Mobile (against Nokia)

Encirclement is recommended when:
the market is loosely segmented  some segments are not being served well by the competitor  the attacker has strong product development resources  the attacker has enough resources to operate in multiple segments simultaneously

This strategy involves bypassing the enemy’s forces altogether. In the business arena, this involves either developing new technologies, or creating new business models. This is a revolutionary strategy that re-writes the rules of the game. The introduction of compact disc technology bypassed the established magnetic tape based defenders. The attackers won the war without a single costly battle. This strategy is very effective when it can be realized.

Flanker Attack
Avoiding a head-on clash by targeting a segment where competitor focus or commitment is weak  The idea is to catch the competitor by surprise and establishing a “beach-head” by the time the competitor wakes up and reacts  E.g. Blackberry, Face Book

Flanker Attack is recommended when:
the market is well-segmented  there are some segments that are not well served by the existing competitors  the target competitor has relatively strong resources and is well able to withstand a headon attack  the attacker has moderate or limited resources

Guerrilla Marketing
The concept of guerrilla marketing was invented as an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget. Typically, guerrilla marketing campaigns are unexpected and unconventional; potentially interactive  consumers are targeted in unexpected places. The objective of guerrilla marketing is to create a unique, engaging and thought-provoking concept to generate buzz, and consequently turn viral

E.g. Road shows, In-mall events, unique promotion tactics etc.

Defensive Strategies
Committed Defender  Defensive Flank (Fighter)  Pre-emptive  Contraction

Committed Defender
An old, seasoned player in the market, with strong commitment of resources, unlikely to give up without a staunch defense  Does not involve investing into product development or innovations, but protecting and sustaining the market share  E.g. Jang; State Life Corp of Pak

Defensive Flanker

This involves the re-deployment of resources to deter a flank attack. The defender strengthens its flank by deploying more resources. The disadvantage of this defense is that it can distract the company from its primary objective and siphon resources away from where they are needed most. In business terms, this involves the introduction of new products, product lines, or brands, the defensive re-positioning of existing products, or additional promotional activity in a market niche E.g. Google Plus; Ptv Sports

“Attack is the best defense”  Muscle flexing  Signaling a strong whiplash to competitors  Covering all possible flanks  Creating barriers for competitors through strategic partnerships/alliances with suppliers, distributors or even other competitors  Gillette; Automobile companies in Pakistan

An exit strategy aimed at gradually leaving low-profit markets or segments through divestments, sell-offs etc.  The resources thus saved will then be utilized in other, more profitable segments or markets

Market Follower Strategies
Counterfeiter: Makes replicas/imitations with no legal cover or justification  Cloner: Makes similar, copy cat products (e.g. Igloo)  Content Follower/Nicher: Remains confined to a limited segment/niche considered unattractive by competitors (e.g. RC Cola)

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