1. Creating Competitive Advantage Dr. Amila Jayarathne

2. Session Outline Competitor Analysis Competitive Strategies
Balancing Customer and Competitor Orientations

3. Competitive Advantage Competitive Marketing Strategies
Competitor Analysis
Competitive Advantage
An advantage over competitors gained by offering consumers greater value than competitors do.
Competitor 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.
Competitive Marketing Strategies
Strategies that strongly position the company against competitors and that give the company the strongest possible strategic advantage.

4. Steps in Analyzing Competitors
Why?
To plan effective marketing strategies the company needs to find out all it can about its competitors. It must constantly compare its marketing strategies, products, prices, channels, and promotions with those of close competitors.
Steps in Analyzing Competitors
Identifying the company’s competitors
Assessing competitors’ objectives, strategies, strengths and weaknesses and reaction patterns
Selecting which competitors to attack or avoid.

5. Identifying Competitors
Normally, identifying competitors would seem a simple task. But companies actually face a much wider range of competitors. Companies must avoid competitor myopia.

6. Different Forms of Competition
Brand Competition
Industry Competition
Form Competition
Generic Competition

7. Porter’s Approach to Competitive Structure Analysis

8. Assessing Competitors
Determining Competitors’ Objectives
Identifying Competitors’ Strategies
Assessing Competitors’ Strengths and Weaknesses
Estimating Competitors’ Reactions

9. Strategic Groups
A group of firms in an industry following the same or a similar strategy.

10. Selecting Competitors to Attack and Avoid
Strong or weak competitors
Close or distant competitors
Good or bad competitors

11. Strong or Weak Competitors
The company can focus on one of several classes of competitors. A useful tool for assessing competitor strengths and weaknesses is customer value analysis.
Customer Value Analysis
Analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors’ offers.

12. Strategic Sweet Spot versus Competitors
Competitors’ offerings
Customers’ needs
Company’s capabilities
Sweet spot
When selecting competitors, the company wants to find the “sweet spot” where it meets customers’ needs in a way that rivals can’t.

13. “Good” or “Bad” Competitors
A company really needs and benefits from competitors. However, a company may not view all of its competitors as beneficial. Good competitors play by the rules of the industry. Bad competitors, in contrast, break the rules.

14. Finding Uncontested Market Spaces
Rather than competing head to head with established competitors, many companies seek out unoccupied positions in uncontested market spaces (No direct competitors) – Blue Ocean Strategy.

15. Designing a Competitive Intelligence System
Main types of information about competitors must be collected, interpreted, distributed and used.

16. Competitive Strategies
What broad marketing strategies might the company use?
Which ones are best for a particular company, or for the company’s different divisions and products?

17. Approaches to Marketing Strategy
No one strategy is best for all companies. Each company must determine what makes the most sense given its position in the industry and its objectives, opportunities and resources.

18. Basic Competitive Strategies
Overall Cost Leadership
Differentiation
Focus

19. Competitive Positions
Competitive Market Positions and Roles
Market Leader
Market Challenger
Market Follower
Market Nicher
40%
30%
20%
10%

20. Market Leader Strategies
Market Leader The firm in an industry with the largest market share.
Expand Total Market
Protect Market Share
Expand Market Share

21. Market Challenger Strategies
A runner-up firm that is fighting hard to increase its market share in an industry.
Full Frontal Attack
Indirect Attack

22. Market Follower Strategies
A runner-up firm that wants to hold its share in an industry without rocking the boat.
Follow at a Distance

23. Market Nicher Strategies
A firm that serves small segments that the other firms in an industry overlook or ignore.
By Customer, Market, Quality-Price, Service
Multiple Niching

24. Balancing Customer and Competitor Orientations
Can the company spend too much time and energy tracking competitors, damaging its customer orientation?

25. Evolving Company Orientations
Customer-Centered
Yes No
Product Orientation
Customer Orientation
Competitor Orientation
Market Orientation No
Competitor-Centered
Yes

26. Summary and Conclusions