Global Marketing Management A European Perspective Warren J. Keegan Bodo B. Schlegelmilch Global Competition and Strategy

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 2 Overview zDimensions of Global Competition zNational Competitive Advantages zIndustry Analysis: Five Forces Model zAnalysis of Industry Groups zCompetitive Advantages of Individual Companies  Summary

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 3 Learning Objectives zUnderstanding the importance of corporate strategies of a company zAppreciating the determinants for selecting, creating and pursuing a particular strategy zKnowing the levels of examining corporate strategy and the competitive position of a firm  Knowing why different companies pursue different strategies

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 4 Global Competition and Strategy: Important Concepts zThe National Diamond zFive Forces Model zGeneric Strategies zPlaying the Spread zStrategic Groups  Hypercompetition

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 5 Dimension of Global Competition zA company`s success in global markets is determined by its ability to establish competitive advantages zForces influencing competition in an industry need to be examined zAnalysis of a firm`s position within an industry is important

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 6 National Competitive Advantage: Determinants of National Advantage

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 7 National Competitive Advantage: Factor Conditions zHuman Resources zPhysical Resources zKnowledge Resources zCapital Resources zInfrastructure Resources zAlternative Categorisation of Factors

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 8 Demand Conditions, Related and Supporting Industries zHome-market demand conditions are important yComposition of home demand yThe size and pattern of growth of home demand zInternationally competitive suppliers provide inputs to downstream industries zContact and coordination give access to foreign markets

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 9 Firm Strategy, Structure, and Rivalry zDifferences in management styles, organisational skills and strategic perspectives create advantages and disadvantages for firms zDomestic rivalry has a powerful influence on competitive advantage, because it keeps an industry dynamic and creates pressure to improve and innovate zIntensity of competition and quality of competitors are important

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 10 Other Forces Acting on the Diamond zChance yOccurrences that are beyond the control of firms zGovernment yBuyer of products and services yPolicy maker of policies on labour, capital formation and product standards zOther Non-market factors yInterest groups, activists and the public

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 11 Dimension of Global Competition

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 12 Industry Analysis zFive Forces Model

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 13 Industry Analysis zThreat of new entrants zThreat of substitute products zBargaining power of suppliers zBargaining power of buyers zRivalry among competitors

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 14 Analysis of Industry Groups zMap of Strategic Groups in a Hypothetical Industry

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 15 Characteristics of Strategic Groups zMobility Barriers yLimit access to specific industry and switch between strategy groups zVarying level of bargaining power with consumer and supplier zThreat of Substitutes yCompanies serving special needs are less vulnerable

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 16 Competitive Advantage of Individual Companies (1) zGeneric strategies for creating competitive advantages

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 17 Competitive Advantage of Individual Companies (2) zBroad Market Strategies yCost-Leadership Advantage yDifferentiation yNarrow Target Strategies yFocused Differentiation yCost Focus yPlaying the Spread

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 18 Competitive Advantage of Individual Companies (3)

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 19 Strategic Perspectives zLayers of Advantage yLess risks if wide portfolio of advantages exist z“Loose Bricks” left in the defensive walls of competitors who are focused on a market area zChanging the Rules yRefuse to play by the rules set by industry leaders zCollaborating yUsing know-how developed by other companies

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 20 Hypercompetition zPorter`s models only provide snapshots of competition z“Hypercompetition” describes a dynamic, competitive world, in which no action or advantages can be sustained for long zThe only advantage of a companies is to manage dynamic strategic interactions: Cost-quality, timing and know-how, entry barriers and deep pockets zCompanies must seek unsustainable advantages

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 21 Summary zVarious Factors are helping industries and countries to achieve competitive advantage zPorter`s five Forces Model zGroups of companies may follow similar strategic dimensions  Focusing on the individual strategy of a company, an understanding of the unique source of the firm`s competitive advantages is of great importance