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competitive advantage
The document discusses competitive advantage and competitor analysis. It provides objectives for understanding competitors and customers through analysis. It then discusses Intel as an example, focusing on how Intel's competitive strategy of superior value and product innovation has led to success. The document outlines steps for analyzing competitors, including identifying competitors, assessing their strategies, strengths/weaknesses, and selecting which to attack or avoid. It also discusses different competitive strategies firms can employ like overall cost leadership, differentiation, and focus.
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competitive advantage
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- 2. Objectives Learn how tounderstand competitors as well as customers via competitor analysis. Learn the fundamentals of competitive marketing strategies based on creating value for customers. Realize the need for balancing customer and competitor organizations in order to become a truly market-centered organization.
- 3. c Intel Has dominated the chipindustry Success is directly related to Intel’s competitive strategy Strategy focuses on superior value and product Heavy focus on product and advertising innovation and R&D investments Changing market needs have challenged Intel to adapt Intel is capitalizing on
- 4. Definition Competitive Advantage Anadvantage over competitors gained by offering consumers greater value than competitors offer.
- 5. Definition Competitive Analysis Theprocess of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.
- 6. Figure 18-1: Steps inAnalyzing Competitors
- 7. Competitor Analysis Steps inthe Process: Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid Firms face a wide range of competition Be careful to avoid “competitor myopia” Methods of identifying competitors: Industry point-of-view Market point-of-view Competitor can help maps
- 8. 230-year-old Encyclopedia Britannica viewed itself as competingwith your publishers of printed encyclopedias. Big mistake! Its real competitors were software encyclopedias and the Internet.
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- 10. Discussion Question Create acompetitor map for one of the following: • • • • • WalMart McDonald’s Nike Starbucks Google
- 11. Competitor Analysis Steps inthe Process: Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid Determining competitors’ objectives Identifying competitors’ strategies Strategic groups Assessing competitors’ strengths and weaknesses Benchmarking Estimating competitors’ reactions
- 12. Competitor Analysis Steps inthe Process: Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid Strong or weak competitors Customer value analysis Close or distant competitors Most companies compete against close competitors “Good” or “Bad” competitors The existence of competitors offers several strategic benefits
- 13. Competitive Strategies Basic WinningCompetitive Strategies: Porter Overall cost leadership Lowest production and distribution costs Differentiation Creating a highly differentiated product line and marketing program Focus Effort is focused on serving a few market segments
- 14. Hohner has successfully implemented a focusstrategy to capture an 85% share of the harmonica market.
- 15. Competitive Strategies Basic CompetitiveStrategies: Value Disciplines Operational excellence Superior value via price and convenience Customer intimacy Superior value by means of building strong relationships with buyers and satisfying needs Product leadership Superior value via product innovation
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- 17. Competitive Strategy Competitive Positions Market Leader Market Challenger Market Follower MarketNicher Expanding the total demand Finding new users Discovering and promoting new product uses Encouraging greater product usage Protecting market share Many considerations Continuous innovation Expanding market share Profitability rises with market share
- 18. Competitive Strategy WD-40 hasa knack for developing new uses for its product. What other brands have adopted a similar strategy? WD40
- 19. Competitive Strategy Competitive Positions Market Leader Market Challenger Market Follower MarketNicher Option 1: challenge the market leader High-risk but high-gain Sustainable competitive advantage over the leader is key to success Option 2: challenge firms of the same size, smaller size or challenge regional or local firms Full frontal vs. indirect attacks
- 20. Pepsi is an exampleof market challenger that has chosen to use a full frontal attack
- 21. Competitive Strategy Competitive Positions Market Leader Market Challenger Market Follower MarketNicher Follow the market leader Focus is on improving profit instead of market share Many advantages: Learn from the market leader’s experience Copy or improve on the leader’s offerings Strong profitability
- 22. Dial Corporation successfully uses amarket follower strategy
- 23. Competitive Strategy Competitive Positions Market Leader Market Challenger Market Follower MarketNicher Serving market niches means targeting subsegments Good strategy for small firms with limited resources Offers high margins Specialization is key By market, customer, product, or marketing mix lines
- 24. Balancing Customer and CompetitorOrientations Companies can become so competitor centered that they lose their customer focus. Types of companies: Competitor-centered companies Customer-centered companies Market-centered companies
- 25. Game playing industry a. Nintendo a.Wii hyperlink b. Microsoft a. Xbox 360 c. Sony a. Play Station
- 27. Threat of NewEntry the existence of barriers to entry economies of product differences brand equity switching costs capital requirements access to distribution absolute cost advantages learning curve advantages expected retaliation government policies
- 28. Competitive Rivalry number ofcompetitors rate of industry growth intermittent industry overcapacity exit barriers diversity of competitors informational complexity and asymmetry brand equity fixed cost allocation per value added level of advertising expense
- 29. Supplier Power supplier switchingcosts relative to firm switching costs degree of differentiation of inputs presence of substitute inputs supplier concentration to firm concentration ratio threat of forward integration by suppliers relative to the threat of backward integration by firms cost of inputs relative to selling price of the product
- 30. Buyer Power buyer concentrationto firm concentration ratio bargaining leverage buyer volume buyer switching costs relative to firm switching costs buyer information availability ability to backward integrate availability of existing substitute products buyer price sensitivity price of total purchase
- 31. Threat of Substitution buyerpropensity to substitute relative price performance of substitutes buyer switching costs perceived level of product differentiation
Editor's Notes
- #19 Clicking the WWW icon will open your web browser and link to the web site pictured in the screen shot.