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Ch 11 dealing with competition

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    Ch 11 dealing with competition Ch 11 dealing with competition Presentation Transcript

    • TOP 2 Learning Concepts for
      Chapter 11:
      Dealing with Competition
      Lady CharmayneHao
      April 1, 2011
    • What to expect?
      Outline
      What determines market segment?
      How market followers strategize?
      2
    • What determines market segment?
      3
      Concept
      Michael Porter’s Five Forces
    • “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
      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
      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
      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
      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!
    • How market followers strategize?
      9
      Concept
      Counterfeiter
      Cloner
      Imitator
      Adapter
    • 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
      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
      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
      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!
    • Implement best strategies by dealing with competition!
      1. Determine Market Segments
      2. Be aware of Market Followers Strategies
      14
      Summary
    • TOP 2 Learning Concepts for
      (Chapter 11)
      Dealing with Competition
      Lady CharmayneHao
      April 1, 2011