MANAGING
COMPETITION
6th December 2018
Which companies are
Competitors???
Competitors are companies that
satisfy the same customer need
Competitive Forces
Threat of :
1. Intense segment
rivalry
2. New entrants
3. Substitute products
Buyers growing
bargaining
power
Supplier’s growing
bargaining power
Market Concept of Competition
• Competitors are companies that
satisfy the same customer need
• Competitors can be direct or indirect
Today’s indirect competitors
could become
tomorrow’s direct competitors
Analyzing Competitors
Once a company identifies its primary competitors, it must
ascertain their strategies, objectives, strengths and weaknesses
1. Their strategies
2. Their objectives – profit maximization,
market share, etc.
3. Their strengths and weaknesses –
Dominant, strong, favorable, tenable, weak or
nonviable
4. Their reaction patterns
Estimating Competitor
Reaction Patterns
1. Laid back (does not react)
2. Selective (reacts only to certain types
of attacks)
3. Tiger (reacts to any assault)
4. Stochastic (no predictable reaction)
Competitive Intelligence System
1. Setting up the system : identifying vital
information, the sources of such information, assigning
responsibility for managing the system.
2. Collecting the Data : on a continuous basis from
field force, trade channels, trade associations, published
data, observation of competitors, internet.
3. Evaluating and analyzing the data
4. Disseminating information and responding
Competitive Strategies
Market Leader
1. Expanding the total market
new users * new uses * more usage
2. Defending the market share – continuous
innovation
3. Defense strategy
flank defense * preemptive defense * counteroffensive
* mobile defense * contraction defense
Six Types of Defense Strategies
2.
Flank
Attacker
1.
2.
Preemptive
Counteroffensive
1.
Position
6.
Contraction
Defender
5.
Mobile
Competitive Strategies
Market Challenger
1. Frontal attack – match the opponent’s product,
advertising, price and distribution
2. Flank attack – on two dimensions : geographical and
segmental
3. Encirclement attack – blitz attack on many fronts
4. Bypass attack – diversifying into unrelated products
* diversifying into new geographical areas * leapfrogging
into new technologies
5. Guerilla warfare – small intermittent attacks to
harass and demoralize the opponent
Competitive Strategies
Market Follower
Innovative Imitation or Product Innovation :
• Imitation – copy some attributes but maintains
differentiation in say packing, advertising, pricing, etc.
•
Cloning – emulate the leader’s product, name, and
packaging with slight variations
•
Adapting – adapts and improves over the leader’s
product
•
Counterfeiting – duplicates the leader’s product
and packages and sells it as that of the leader
surreptiously
Competitive Strategies
Market Nicher
1.
2.
3.
4.
5.
6.
End user
Vertical level
Customer size
Specific customer
Geographic
Product or product
line
7. Product feature
8. Job shop
9. Quality price
10. Service
11. Channel
THAT’S ALL FOR
TODAY!!!