Chapter #9
Nike
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Nike
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Puma
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Older audience endorsed by no one
Adidas
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Cool younger market
New Balance
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Niche market Skate boarders
Sketchers
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Hip image
Vans
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European stylish
K-Swiss
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Market leader early product innovator outsource production spend lots of
money on marketing
Leader in Soccer, recently acquired Reebok
Starbury One
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Low Price endorsed by Stephan Marbury
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Early market share leader
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Share Maintenance
Repeat business from current customers
 Capture new customers
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Challenger
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Share growth
Growth stage often short (8 years)
Opportunities and risks in a growth
market
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It is easier to gain share when a market is
growing
Share gains are worth more in a growth market
than in a mature market
Price competition is likely to be less intense
Early participation in a growth market is
necessary to make sure that the firm keeps pace
with the technology
Gaining Share is Easier
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No established preferences/special needs not
yet identified
Established competitors less likely to act
aggressively as long as their growth rate is
satisfactory (Dell example)
Share Gains are worth more
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Can hold share as market grows
The existence of positive network effects
Future changes in technology (hd TV v Blue
Ray)
Future competitive structure of the industry
Future fragmentation of the market
Early Entry Is Necessary for
Technical Expertise
Stents 5.3 billion in 2006
Johnson & Johnson 1994
Guidant 1997 (70%)
J&J 2003 (huge demand)
Boston Scientific 2004
(65% market share)
Market Leaders (retain current
customers)
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Maintaining/Improving satisfaction and loyalty
Improve Quality
 Selective Product modification
 Better service
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Encouraging/simplifying repeat purchases
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Distribution
Reducing attractiveness of switching
Functional barriers to switching
 Compete on Price
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Market Leader (stimulate selective
demand among later adopters)
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Head-to-head positioning
Fighter brand
 Match competitor offering (confrontation strategy)
 Strategic withdrawal
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Differentiated Positioning
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Market expansion
New lines
 New channels
 New messages
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Followers deciding whom to attack
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Attack the market-share leader
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Frontal or Leapfrog
Attack another follower
Attack one or more smaller competitors who
have limited resources
Avoid direct attacks
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Flanking (Citrus World)