Ch 11 dealing with competition.hao

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Ch 11 dealing with competition.hao

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

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