Ch 11 dealing with competition

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  • 1. TOP 2 Learning Concepts for
    Chapter 11:
    Dealing with Competition
    Lady CharmayneHao
    April 1, 2011
  • 2. What to expect?
    Outline
    What determines market segment?
    How market followers strategize?
    2
  • 3. What determines market segment?
    3
    Concept
    Michael Porter’s Five Forces
  • 4. “Segment Rivalry” refers to competition among existing firms
    4
    Explanation of Concept: Determining Market Segment
    How it occurs?
    Number of Competitors
    Exit Barriers
    Switching Cost
    Differentiation
    Diversity
    Quality
  • 5. 5
    Outline
    Explanation of Concept
    Explanation of Concept: Determining Market Segment
    “Threat of new entrants” refers to the threat existing competitors face upon new competitors
    Barriers to entry:
    Economies of scale
    Product Differentiation
    Capital Requirements
    Switching Cost
    Distribution Channel Access
    Government Policies
    Attractive if entry barriers are high and exit are low!
  • 6. 6
    Outline
    Explanation of Concept
    Explanation of Concept: Determining Market Segment
    “Threat of substitutes” refers
    How?
    Substitute Performance
    Price
    Quantity
    Buyer’s Switching Cost
    Substitutes place a limit on prices and profit!
  • 7. 7
    Outline
    Explanation of Concept
    Explanation of Concept: Determining Market Segment
    “Buyer Power” refers to customer’s price sensitivity and negotiating power
    Factors affecting buyer power:
    Number of customer
    Size
    Differences
    Price Sensitivity
    Switching Cost
    Brand Identity
    Substitutes place a limit on prices and profit!
  • 8. 8
    Outline
    Explanation of Concept
    Explanation of Concept: Determining Market Segment
    “Supplier Power” refers to market of inputs
    Factors affecting supply power:
    Supplier Concentration
    Availability of Substitute Inputs
    Product Differentiation
    Buyer Willingness
    Switching Cost
    Substitutes place a limit on prices and profit!
  • 9. How market followers strategize?
    9
    Concept
    Counterfeiter
    Cloner
    Imitator
    Adapter
  • 10. 10
    Concept
    Explanation of Concept
    Explanation of Concept: Market Follower Strategies
    “COUNTERFEITER” duplicates a leader’s product
    Where?
    Why?
    How?
    Packages and sells product on the black market through disreputable dealers for financial gain!
  • 11. 11
    Concept
    Explanation of Concept
    Explanation of Concept: Market Follower Strategies
    “CLONER” emulates the leader’s products with slight variations
    What?
    How?
    Product, name, and packaging are almost identical but cost less than the leader’s product!
  • 12. 12
    Concept
    Explanation of Concept
    Explanation of Concept: Market Follower Strategies
    “IMITATOR” copies few things but maintains differentiation
    What?
    How?
    Packaging, advertising, pricing, or location differs from the leader!
  • 13. 13
    Concept
    Explanation of Concept
    Explanation of Concept: Market Follower Strategies
    “ADAPTER” adapts or improves leader’s product
    What?
    How?
    Why?
    Products might be sold to different markets but often grows into a future challenger!
  • 14. Implement best strategies by dealing with competition!
    1. Determine Market Segments
    2. Be aware of Market Followers Strategies
    14
    Summary
  • 15. TOP 2 Learning Concepts for
    (Chapter 11)
    Dealing with Competition
    Lady CharmayneHao
    April 1, 2011