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Ch 11 dealing with competition.hao

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  • 1. TOP 10 Learning Concepts for
    Chapter 11:
    Dealing with Competition
    Lady CharmayneHao
    April 2011
  • 2. Dealing with competition
    Outline : Top 10 Concepts
    What determines market segment?
    How to indentify primary competitors?
    What to consider on competitor
    analysis?
    What the “supposed” market
    structure is
    What are the other competitive
    strategies?
    2
  • 3. Dealing with Competition
    How market challengers strategies?
    What attack options are available?
    Determine specific attack strategies
    for effective competition
    How do market followers strategize?
    Possible Niche roles for successful
    Nichmanship
    3
    Outline
    Outline : Top 10 Concepts
  • 4. TOP 10 Learning Concepts for
    Chapter 11:
    Dealing with Competition
    Source:
    Kotler, Philip and Keller, Lane
    Marketing Management, 13th edition
    Pearson one, Prentice Hall, Inc., 2009
  • 5. Dealing with competition
    What determines market segment?
    How to indentify primary competitors?
    What to consider on competitor
    analysis?
    What the “supposed” market
    structure is
    What are the other competitive
    strategies?
    5
    Outline : Top 10 Concepts
  • 6. What determines market segment?
    6
    Concept #1
    Michael Porter’s Five Forces
  • 7. “Segment Rivalry” refers to competition among existing firms
    7
    Concept #1
    How it occurs?
    Number of Competitors
    Exit Barriers
    Switching Cost
    Differentiation
    Diversity
    Quality
  • 8. “Threat of new entrants” refers to the threat existing competitors face upon new competitors
    8
    Concept #1
    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!
  • 9. “Threat of substitutes” refers to
    9
    Concept #1
    How?
    Substitute Performance
    Price
    Quantity
    Buyer’s Switching Cost
    Substitutes place a limit on prices and profit!
  • 10. “Buyer Power” refers to customer’s price sensitivity and negotiating power
    10
    Concept #1
    Factors affecting buyer power:
    Number of customer
    Size
    Differences
    Price Sensitivity
    Switching Cost
    Brand Identity
    Substitutes place a limit on prices and profit!
  • 11. “Supplier Power” refers to market of inputs
    11
    Concept #1
    Factors affecting supply power:
    Supplier Concentration
    Availability of Substitute Inputs
    Product Differentiation
    Buyer Willingness
    Switching Cost
    Substitutes place a limit on prices and profit!
  • 12. Dealing with competition
    What determines market segment?
    How to indentify primary competitors?
    What to consider on competitor
    analysis?
    What the “supposed” market
    structure is
    What are the other competitive
    strategies?
    12
    Outline : Top 10 Concepts
  • 13. How to identify primary competitors?
    13
    Concept # 2
    Number of
    Sellers and
    Differentiation
    Degree
    Entry,
    Mobility, and
    Exit Barriers
    Industry
    Degree
    of
    Globalization
    Cost
    Structure
    Degree of
    Vertical
    Integration
  • 14. How to identify primary competitors?
    14
    Concept # 2
    Number of
    Sellers and
    Differentiation
    Degree
    Entry,
    Mobility, and
    Exit Barriers
    How many
    and
    how different?
    Circumstances
    that determine when
    To enter and exit
    Industry
    Degree
    of
    Globalization
    Cost
    Structure
    Level
    Of
    growth to a global
    scale
    Expenses that a firm
    must account when
    manufacturing
    a product or service
    Degree of
    Vertical
    Integration
    Level
    Of
    management control
    style
  • 15. Dealing with competition
    What determines market segment?
    How to indentify primary competitors?
    What to consider on competitor
    analysis?
    What the “supposed” market
    structure is
    What are the other competitive
    strategies?
    15
    Outline : Top 10 Concepts
  • 16. What to consider on competitor analysis?
    16
    Concept # 3
    Share of market
    Variables
    Share of mind
    Share of heart
  • 17. “Share of Market” refers to the competitor’s share of the target market
    17
    Concept # 3
    Benchmarking can improve market share!
  • 18. 18
    Concept # 2
    Concept # 3
    “Share of mind” refers to the percentage of customers whose company name first came to their mind
    “Name the first company that comes to your mind in this industry!”
  • 19. “Share of heart” refers to the percentage of customers whose company’s product they want to buy
    19
    Concept # 3
    “Name the company from which you would prefer to buy!”
  • 20. Dealing with competition
    What determines market segment?
    How to indentify primary competitors?
    What to consider on competitor
    analysis?
    What the “supposed” market
    structure is
    What are the other competitive
    strategies?
    20
    Outline : Top 10 Concepts
  • 21. What is the “supposed” market structure?
    21
    Concept # 4
  • 22. “Market Leader” refers to the firm with the largest market share in the relevant product market
    22
    Concept # 4
    Some Historical Market Leaders:
  • Dealing with competition
    What determines market segment?
    How to indentify primary competitors?
    What to consider on competitor
    analysis?
    What the “supposed” market
    structure is
    What are the other competitive
    strategies?
    23
    Outline : Top 10 Concepts
  • 25. What are the other competitive strategies?
    24
    Concept # 5
    Market
    Challenger
    Market
    Followers
    Market
    Nichers
    Market
    Leader
  • 26. “Market Nichers” is a firm that follows targeting a narrow/large segment market strategy with specialized products or services
    25
    Concept # 5
    Market
    Challenger
    Market
    Followers
    Market
    Nichers
    Market
    Leader
  • 27. 26
    Concept # 5
    “Market follower” is a willing to maintain its market share and not rock the boat.
    Market
    Challenger
    “Product imitation”
    Market
    Followers
    Market
    Nichers
    Market
    Leader
  • 28. “Market Challenger” refers to a firm that attempts to confront the market leader
    27
    Concept # 5
    Market
    Challenger
    Market
    Followers
    Market
    Nichers
    Market
    Leader
  • 29. Dealing with Competition
    How market challengers strategies?
    What attack options are available?
    Determine specific attack strategies
    for effective competition
    How do market followers strategize?
    Possible Niche roles for successful
    Nichmanship
    28
    Outline
    Outline : Top 10 Concepts
  • 30. 29
    Concept # 6
    How market challengers strategies
    Define Strategic Objective and opponents
    Choose general attack strategy
    Choose specific attack strategy
    Market Leader
  • 31. Most aim to increase market share!
    30
    Concept # 6
    Define Strategic Objective and opponents
    Decide whom to attack!
    Choose general attack strategy
    • Market Leader
    • 32. Firm’s own size
    underfinanced
    and not doing
    the job
    • small and local
    firms
    Choose specific attack strategy
  • 33. What attack options are available?
    31
    Concept # 6
    Define Strategic Objective and opponents
    Use five attack strategies!
    Choose general attack strategy
    Choose specific attack strategy
  • 34. How?
    32
    Concept # 6
    Define Strategic Objective and opponents
    Choose general attack strategy
    Go beyond the broad strategies and develop more!
    Choose specific attack strategy
  • 35. Dealing with Competition
    How market challengers strategies?
    What attack options are available?
    Determine specific attack strategies
    for effective competition
    How do market followers strategize?
    Possible Niche roles for successful
    Nichmanship
    33
    Outline
    Outline : Top 10 Concepts
  • 36. What attack options are available?
    34
    Concept # 7
    A
    T
    T
    A
    C
    K
    Frontal
    Bypass
    Flank
    Guerrilla
    Encirclement
  • 37. 35
    Concept # 7
    Frontal Attack match opponent’s….
    A
    T
    T
    A
    C
    K
    Product
    Advertising
    Price
    Distribution
    Frontal
    Bypass
    Flank
    Guerrilla
    Encirclement
  • 38. 36
    Concept # 7
    Flank attack directs towards two directions…
    A
    T
    T
    A
    C
    K
    Frontal
    Geographic
    Spot underperforming areas
    Segmental
    Uncover market needs
    Bypass
    Flank
    Guerrilla
    Encirclement
  • 39. 37
    Concept # 7
    Encirclement capture wide slice of an enemy’s territory through blitz
    A
    T
    T
    A
    C
    K
    Frontal
    How?
    Launch grand offensive!
    Bypass
    Flank
    Guerrilla
    Encirclement
  • 40. 38
    Concept # 7
    Bypass attack offers 3 line approach
    Diversify into
    unrelated products
    New geographical markets
    Leapfrogging to new technologies
    A
    T
    T
    A
    C
    K
    Frontal
    Bypass
    Flank
    Guerrilla
    Encirclement
    Bypass and attack easier markets!
  • 41. 39
    Concept # 7
    Guerilla attack consists of small, intermittent attacks to…
    Harass
    Demoralize
    “Secures permanent footholds”
    A
    T
    T
    A
    C
    K
    Frontal
    Bypass
    Flank
    Guerrilla
    Encirclement
  • 42. Dealing with Competition
    How market challengers strategies?
    What attack options are available?
    Determine specific attack strategies
    for effective competition
    How do market followers strategize?
    Possible Niche roles for successful
    Nichmanship
    40
    Outline
    Outline : Top 10 Concepts
  • 43. Determine specific attack strategies for effective competition.
    41
    Concept # 8
    Improved Service
    Product Discounts
    Product Innovation
    Prestige Goods
    Distribution Innovation
    Lower Priced Goods
    Manufacturing –Cost
    Reduction
    Product Proliferation
    Intensive Advertising
    Promotion
    Value-priced Goods
  • 44. Dealing with Competition
    How market challengers strategies?
    What attack options are available?
    Determine specific attack strategies
    for effective competition
    How do market followers strategize?
    Possible Niche roles for successful
    Nichmanship
    42
    Outline
    Outline : Top 10 Concepts
  • 45. How do market followers strategize?
    43
    Concept #9
    Counterfeiter
    Cloner
    Imitator
    Adapter
  • 46. “COUNTERFEITER” duplicates a leader’s product
    44
    Concept #9
    Where?
    Why?
    How?
    Packages and sells product on the black market through disreputable dealers for financial gain!
  • 47. “CLONER” emulates the leader’s products with slight variations
    45
    Concept #9
    What?
    How?
    Product, name, and packaging are almost identical but cost less than the leader’s product!
  • 48. “IMITATOR” copies few things but maintains differentiation
    46
    Concept #9
    What?
    How?
    Packaging, advertising, pricing, or location differs from the leader!
  • 49. “ADAPTER” adapts or improves leader’s product
    47
    Concept #9
    What?
    How?
    Why?
    Products might be sold to different markets but often grows into a future challenger!
  • 50. Dealing with Competition
    How market challengers strategies?
    What attack options are available?
    Determine specific attack strategies
    for effective competition
    How do market followers strategize?
    Possible Niche roles for successful
    Nichmanship
    48
    Outline
    Outline : Top 10 Concepts
  • 51. Possible Niche roles for successful nichemanship
    49
    Concept # 10
    Customer-size specialist
    • End-user specialist
    Concentrate on selling to either small, medium-sized, or large customers
    Specializes in serving one type of end-user
    Geographic specialist
    Vertical-level specialist
    Sells only on certain locality, region, or area of the world
    Specializes at some vertical level of production-distribution value chain
  • 52. Possible Niche roles for successful nichemanship
    50
    Concept # 10
    Product-line specialist
    Specific-customer specialist
    Carries or produces only one product line or product
    Limits its selling to one or few customers
    Job-shop specialist
    Product-feature
    Specializes in producing a certain type of product or product feature
    Customizes its products for individual customers
  • 53. Possible Niche roles for successful nichemanship
    51
    Concept # 10
    Quality-price specialist
    Channel specialist
    Operates at the low- or high-quality, high-price end of the handheld calculator market
    Specializes in serving only one channel of distribution
    Service specialist
    Offers one or more services not available from other firms
  • 54. Dealing with competition
    Summary : Top 10 Concepts
    What determines market segment?
    Michael Porter’s Five forces
    How to indentify primary competitors?
    5 identifiers for primary competitors
    What to consider on competitor analysis?
    Shares of strength and weaknesses
    What the “supposed” market structure is
    Hypothetical Market Structure
    52
  • 55. Dealing with Competition
    What are the other competitive
    strategies?
    3 other strategies for competition
    How market challengers strategies?
    3 strategies of market challengers
    What attack options are available?
    5 General attack strategies
    53
    Outline
    Summary : Top 10 Concepts
  • 56. Dealing with Competition
    How do market followers strategize?
    4 effective strategies for market followers
    Possible Niche roles for successful
    Nichmanship
    11 Niche roles
    54
    Outline
    Summary : Top 10 Concepts
  • 57. TOP 10 Learning Concepts for
    Chapter 11:
    Dealing with Competition
    Lady CharmayneHao
    April 1, 2011
    Source:
    Kotler, Philip and Keller, Lane
    Marketing Management, 13th edition
    Pearson one, Prentice Hall, Inc., 2009