This document outlines 10 concepts for dealing with competition. It discusses understanding industry forces and structure, identifying and evaluating competitors, analyzing different types of market positions and strategies such as market leaders, challengers, followers and nichers. It also covers developing defense strategies and balancing a focus on customers and competition. The key is understanding the broader industry and competitors while exploiting weaknesses and emerging customer needs.

1. V48 CHAPTER 11
DEALING WITH COMPETITION
Top 10 Concepts
JOHNSON M. MELO
Ateneo Graduate School of Business
March 20, 2010

2. Concept 1
Understand your Industry
Potential Entrants
(Threat of
Mobility)
Suppliers Industry Buyers
(Supplier power) Competitors (Buyer power)
(Segment rivalry)
Substitutes
(Threats of
substitutes)

3. Concept 1 Cont’d - Understand Your Industry
Barriers and Profitability
Exit barriers
Low High
Entry Barriers
Low Low, stable Low, risky
returns returns
High, stable High, risky
High returns returns

4. Concept 1 Cont’d - Understand Your Industry
Strategic Groups
High
Group A
•Narrow line
•Lower mfg. cost
•Very high service Group C
Quality
•High price •Moderate line
•Medium mfg. cost
Group B •Medium service
•Full line •Medium price
•Low mfg. cost
•Good service
•Medium price Group D
•Broad line
Low •Medium mfg. cost
•Low service
•Low price
High Vertical Integration Low

5. Concept 2
Identify and Evaluate Your
Competitors
Markets
Individual Commercial
Users & Industrial Educational
Personal Dell
Computers
Products
Hardware
Accessories
Software
Competitor’s
Expansion Plan

6. Concept 2 cont’d - Identify and Evaluate Your Competitors
Customer’s Ratings of Competitors on Key Success
Factors
6

7. Concept 2 cont’d - Identify and Evaluate Your Competitors
Share of market
Share of mind
Share of heart
Strengths and Weaknesses

8. Concept 3
Evaluate Market Structure
Market
nicher
Market Market Market
leader challenger follower
40% 30% 20% 10%
Expand Market Attack leader Imitate Special-
Defend Market Share Status quo ize
Expand Market Share

9. Concept 4
Analyze Your Competitors
Objectives
Strategies
Competitor
Actions
Reaction
Patterns Strengths &
Weaknesses

10. Concept 5
Market Leader Strategies
Expanding the Total Market
New Users
New Uses, More Usage
Protecting Market Share
Innovation
Expanding Market Share
Fortification
Product Innovation
Confrontation
Market Segment Innovation
Harassment
Distribution Innovation
Promotion Innovation
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11. Concept 6
Market Challenger Strategies
Define the strategic objective and opponents
Choose a general attack strategy
Choose a specific attack strategy
(4) Bypass attack
(2) Flank attack
(1) Frontal attack
Attacker
Defender
(3) Encirclement attack
(5) Guerilla attack
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12. Concept 7
Market Follower Strategies
Counterfeiter
Cloner
Imitator
Adapter
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13. Concept 8
Market Nicher Strategies
End-user specialist
Vertical-level specialist
Customer-size specialist
Specific-customer specialist
Geographic specialist
Product or product-line specialist
Product-feature specialist
Job-shop specialist
Quality-price specialist
Service specialist
Channel specialist
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14. Concept 9
Defense Strategies
(2) Flank defense
(3) Preemptive (1)
Attacker defense Position (6) Contraction
defense defense
(4) Counter-
offensive
defense
Defender
(5)
Mobile
defense

15. Concept 10
Balance
Customer Competition
+ ID opportunities
+ Fighter orientation
+ Long-run profit
+ Alert
+ Emerging needs & groups
+ Exploit weaknesses
- Reactive

16. Summary and Conclusion
Summary:
Dealing with competition requires understanding your
industry, your competitors, your market position,
competitors strategies and your customers.
Conclusion:
To be competitive we need to pay attention to the
industry as a whole, competitors strategies and the
needs of consumers.
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17. V48 CHAPTER 11
DEALING WITH COMPETITION
Top 10 Concepts
THANK YOU
JOHNSON M. MELO
Ateneo Graduate School of Business
March 20, 2010