Positioning and Competition
Arild Aspelund
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Competition in the Automobile Market
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Competition in the Pasta Market
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Outline
• Porter’s competitive forces revisited
• Identifying competition
– Industry perspective
– Market perspective
• Analyzing competition
• Competitive strategies
– for incumbents
– And new entrants
• Positioning
– PODs and POPs
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Porter’s Competitive Forces
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Identifying Competition
• Industry concept of competition
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Number of actors and degree of differentiation
Entry, mobility and exit barriers
Cost structure
Degree of vertical integration (but also horizontal)
Degree of globalization
• Market Concept of Competition
– With whom are you competing for buying power?
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Primary states of Competition
Pure Monopoly
Oligopoly
Monopolistic
Competition
Pure Competition
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Analyzing Competition
•
Strategies
•
Objectives
– Why are your competitors in your product market?
•
Strengths and weaknesses
– Share of market
– Share of mind
– Share of heart
•
Selecting main competitors
– Strong versus weak
– Close versus distant
– “Good” versus “Bad”
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An Example of a Market Structure
10%
20%
Market Market
Nichers Follower
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30%
Market
Challenger
40%
Market
Leader
Strategies for Market Leaders
• Expanding the total market
– More usage
– New customers
• Product diversification
• Market diversification
• Geographical expansion
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Strategies for Market Leaders
- Defensive Strategies
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Other Competitive Strategies
Market
Challengers
Market
Followers
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Market
Nichers
Market Challenger Strategies
• Set the strategic objective and choose the opponent
• Choose the general attack strategy
– Frontal attack
– Flank attack
• By geography or segments
– Encirclement attack
– Bypass attack
– Guerilla warfare
• Ex: Pepsico, NetCom, Synnøve Finden
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Market Follower Strategies
Counterfeiter
Cloner
Imitator
Adapter
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Kinesiske
Chery QQ og
Chevrolet
Spark
Niche Market Strategies
• The strategy is basically to find a niche where competition is less
intense, but profit potential is still significant
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Positioning
Act of designing the company’s
offering and image to occupy
a distinctive place in the mind of
the target market.
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Brand Positioning – PODs and POPs
• Points-of-difference (PODs)
– Attributes or benefits consumers strongly associate with a brand,
positively evaluate, and believe they could not find to the same extent
with a competitive brand
• Points-of-parity (POPs)
– Associations that are not necessarily unique to the brand but may be
shared with other brands
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Choosing PODs
• Related to consumer desires
– Relevance
– Distinctiveness
– Credibility
• Related to ability to deliver
– Feasibility
– Communicability
– Sustainability
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Differentiation Strategies
• Product differentiation
VS
• Personnel differentiation
VS
• Channel differentiation
VS
• Image differentiation
VS
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Product Life Cycles
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The BCG Matrix
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Summary and continuation
• Summary
– We have used Porter’s five forces to find concentrations of power and
competitive barriers in an industry
– We have defined some distinct categories of competition and set out some
factors for competitive analysis
– We have found some good strategies for incumbents and market
challengers
– Finally, we have defined the concept positioning and given some thoughts
on PODs and POPs
• Continuation
– Service Marketing and Product Strategies
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