Marketing strategy

Competitor Analysis & Creating Sustainable Competitive Advantage

Taufique HossainMarketing StrategyMKT 4601If you dont have a competitive advantage, dont competeJack Welch, GE2Key Questions in Marketing StrategyWhere? In which markets are we competing?Technology, customer groups, geographic markets, etc.

How? How are we competing in these markets (value proposition)?Competitive advantage, corporate posture, etc.

With whom?Which relationships do we have to develop or do we need to nurture?Selection of channel members, logistic partners, sourcing decisions, etc.3Sources of Competitive AdvantageCost leadershipDifferentiationFocus4Advantages of Companies: A Different ViewProduct Leadershipbest productOperational Excellencebest total costsCustomer Intimacybest total solutionProduct DifferentiationOperative CompetenceCustomer Orientation Treacy and Wiersema (1993)5Changing the Value Perspective: Advantages at the Product LevelHighRelativeOfferingvs. KeyCompetitorsLowFactor 1Factor 2Factor 3Factor 4Factor 5Factor 6Factor 7Factor 8Factor 9Factor 10UsKey Factors of Product, Service, and Delivery6Changing the Value Perspective: An ExampleHighRelativeOfferingvs. KeyCompetitorsLowEatingFacilitiesArchitectureLoungeRoom Size24-HourReceptionRoomAmenitiesBed QualityHygieneSilencePriceUsCompetitor 1Competitor 2Key Factors of Product, Service, and Delivery7Four Steps to a New Value PropositionReduceWhat factors should bereduced well below theindustry standard?EliminateWhat factors should beEliminated that the industry has taken for granted?RaiseWhat factors should be raised well beyond the industry standard?CreateWhat factors should becreated that the industry has never offered ?New ValuePropositionKim and Mauborgne (1997)8New Value Proposition ExampleHighRelativeOfferingvs. KeyCompetitorsLowEatingFacilitiesArchitectureLoungeRoom Size24-HourReceptionRoomAmenitiesBed QualityHygieneSilencePriceUsCompetitor 1Competitor 2Key Factors of Product, Service, and Delivery9Learning from Competitors

10Components of Competitor Analysis

11Competitor Objectives

12Competitor Strategies

13Competitor Resources

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Competitor Capabilities-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012-2-1012Financial strengthStaying powerStrong R&DTechnological breadthQuick response capabilityEuropean marketingFinancial strengthStaying powerStrong R&DTechnological breadthQuick response capabilityEuropean marketingSelf: total 5Competitor A: total 6Competitor B: total 4Competitor C: total -2Key success factorsKey success factors15Future Competitor Strategies

16Advantage Creating ResourcesContribute to providing value for customersAre hard for competitors to acquire or imitateAre unique to firmSustainable Competitive AdvantageGeneric Routes to competitive advantage creationCustomer valued uniquenessCost relative to competitorsHighAverageLowHighAverageLowCost DriversUniqueness DriversSustaining competitive AdvantageUnique & valued productsClear, tight definition of market targetsEnhanced customer linkagesEstablished brand & company credibility.Hypothetical Market StructureStrategies for Market LeaderExpanding Total MarketNew CustomerMore UsageDefending Market SharePosition DefenseFlank DefensePreemptive DefenseCounteroffensive DefenseMobile DefenseContraction DefenseExpanding Market ShareStrategies for Market ChallengerDefining the strategic objective and opponentsAttack the market leaderAttack firms of its own sizeAttack small local & regional firmsChoosing general attack strategyFrontal AttackFlank AttackEncirclement AttackBypass AttackGuerilla WarfareChoosing specific attack strategyStrategies for Market FollowersCounterfeitClonerImitatorAdapterStrategies for Market NichersChoosing the battlegroundFocusing EffortAbility to segment the marketEfficient use of R&D resourcesThinking SmallCreate, Expand & Protect.

ReadingHooley et al. Chapters 5 and 11.Kotler et al. Chapter 9.Newbert (2007), Empirical Research on the Resource-Based View of the Firm: An Assessment and Suggestions for Future Research, Strategic Management Journal, 28, 121-146.Treacy and Wiersema (1993), Customer Intimacy and Other Value Disciplines, Harvard Business Review, January-February, 84-93.Kim and Mauborgne (1997), Value Innovation: The Strategic Logic of High Growth, Harvard Business Review, January-February, 103-112.

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