Presentation on theme: "Definition Competitive Advantage"— Presentation transcript:
0 Competitive advantage Competitive advantage requires delivering more value and satisfaction to target consumers than do competitors.Competitive marketing strategies are how companies analyze their competitors and develop value-based strategies for profitable customer relationships.18
1 Definition Competitive Advantage An advantage over competitors gained by offering consumers greater value than competitors offer.
2 Definition Competitive Analysis The process of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.
4 Competitor Analysis Steps in the Process: Firms face a wide range of competitionBe careful to avoid “competitor myopia”Methods of identifying competitors:Industry point-of-viewMarket point-of-viewCompetitor maps can helpSteps in the Process:Identifying CompetitorsAssessing CompetitorsSelecting Competitors to Attack or Avoid
6 Competitor Analysis Steps in the Process: Identifying Competitors Determining competitors’ objectivesIdentifying competitors’ strategiesStrategic groupsAssessing competitors’ strengths and weaknessesBenchmarkingEstimating competitors’ reactionsSteps in the Process:Identifying CompetitorsAssessing CompetitorsSelecting Competitors to Attack or Avoid
7 Competitor Analysis Steps in the Process: Identifying Competitors Strong or weak competitorsCustomer value analysisClose or distant competitorsMost companies compete against close competitors“Good” or “Bad” competitorsThe existence of competitors offers several strategic benefitsSteps in the Process:Identifying CompetitorsAssessing CompetitorsSelecting Competitors to Attack or Avoid
8 Competitor Analysis Designing Competitive Intelligence Systems A Well-Designed CI System:Identifies types and sources of competitive informationContinuously collects informationChecks reliability and validity of informationInterprets and organizes informationDistributes information to decision makers and responds to queries
9 Competitive Strategies Basic Winning Competitive Strategies: PorterOverall cost leadershipLowest production and distribution costsDifferentiationCreating a highly differentiated product line and marketing programFocusEffort is focused on serving a few market segments
10 Competitive Strategies Basic Competitive Strategies: Value DisciplinesOperational excellenceSuperior value via price and convenienceCustomer intimacySuperior value by means of building strong relationships with buyers and satisfying needsProduct leadershipSuperior value via product innovation
11 Competitive Positions Competitive StrategyExpanding the total demandFinding new usersDiscovering and promoting new product usesEncouraging greater product usageProtecting market sharePrevent or fix weaknessesFulfill value promiseKeep prices consistent with valueBuild relationshipsContinuous innovationExpanding market shareProfitability rises with market shareCompetitive PositionsMarket LeaderMarket ChallengerMarket FollowerMarket Nicher
12 Campbell’s is a market leader Campbell’s is a market leader. It tries to up demand by encouraging new uses through recipe suggestions.
13 Competitive Positions Competitive StrategyCompetitive PositionsChallenge the market leaderHigh-risk but high-gainSustainable competitive advantage over the leader is key to successChallenge firms of the same size or smaller regional and local firmsFull frontal vs. indirect attacksMarket LeaderMarket ChallengerMarket FollowerMarket Nicher
14 VIRGIN COLAVirgin Drinks took on the leaders head-on, launching its own cola, advertising heavily, and trying to get into all the same retail outlets that stocked the leading brands. At Virgin Cola’s launch, Virgin CEO Richard Branson even drove a tank through a wall of rivals’ cans in New York’s Times Square to symbolize the war he wished to wage on the big, established rivals. However, Coke’s and Pepsi’s viselike grip on U.S. shelf space proved impossible for Virgin Drinks to break. Although Virgin Drinks is still around, it has never gained more than a 1percent share of the U.S. cola market.
15 Competitive Positions Competitive StrategyCompetitive PositionsFollow the market leaderMany advantages:Learn from the market leader’s experienceCopy or improve on the leader’s offeringsStrong profitabilityDoes not mean being a carbon copy of the leaderMarket LeaderMarket ChallengerMarket FollowerMarket Nicher
16 Competitive Positions Competitive StrategyCompetitive PositionsServing market niches means targeting subsegmentsGood strategy for small firms with limited resourcesEarns high margins rather than high volumeSpecialization is keyCustomer size, geographic, quality-price, serviceMarket LeaderMarket ChallengerMarket FollowerMarket Nicher