marketing strategy
DESCRIPTION
MARKETING STRATEGY. 11 Dealing with Competition. Internal Analysis 1. Analysis of Organizational Strengths and Weaknesses. - PowerPoint PPT PresentationTRANSCRIPT
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MARKETING STRATEGY
11 Dealing with Competition
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Internal Analysis1. Analysis of Organizational Strengths and
Weaknesses
To understand the capabilities of a firm, its internal resources should be analysed in relation to the value they offer to customers. Such an analysis can indicate the areas of strength and weakness of the company and permit the decision makers to take corrective actions in order to protect and maintain the strengths, while trying to reduce weaknesses.
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External Analysis1. Market Threats and OpportunitiesPossible Threats:
new competitors A change in consumption patterns the evolution of technology New governmental regulations
Possible Opportunities: The development of a new market niche Governmental intervention for business development in specific
industrial sectors Changes in consumption patterns of the evolution of technology
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Porter analysis
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Figure 1.1 Five Forces Determining Segment Structural Attractiveness
Potential entrants: High / low entry / exit barriers Suppliers Buyers Industry competitors: aggressive competition –
unattractive – barrier of entry Substitutes: segment is unattractive when there
are actual and potential substitutes
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Industry Concept of Competition
Number of sellers and degree of differentiation
Entry, mobility, and exit barriers restaurant / airline
Cost structure Degree of vertical integration Degree of globalization
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Industry Concept of Competition
Pure monopoly: only one firm provides a certain product (e.g. EAC)
Oligopoly: small number of usually large firms Monopolistic competition: many sellers of
differentiated product (e.g. technology) Pure competition: many competitors offer the
same / similar product or service
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Analyzing Competitors
Share of market: competitor’s share of target market
Share of mind: percentage of customers who named the competitors – Company that comes to mind
Share of heart: name the company from which you would prefer to buy a product
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Other Competitive Strategies
Market challengers: being the leader in the market (e.g. Toyota, Airbus)
Market followers Market nichers
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Competitive Strategies - Market Challenger Strategies Define the strategic objective and
opponents: whom to attack to increase market share
Choose an attack strategy
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Competitive Strategies - Specific Attack Strategies
Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation
Product innovation Improved services Distribution innovation Manufacturing-cost
reduction Intensive advertising
promotion
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Competitive Strategies
Market followers: Product differentiation and image are low, service quality is comparable, price sensitivity is high. Companies should try to keep current customers, keep low manufacturing costs, increase product quality and service
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Competitive Strategies
Market nichers: be a leader in a small market. Avoid competing with larger firms by targeting smaller market segments which are of no interest of the larger firms