Professional Documents
Culture Documents
Dealing with
Competition
Pure
Pure Monopoly
Monopoly
Oligopoly
Oligopoly
Monopolistic
Monopolistic Competition
Competition
Pure
Pure Competition
Competition
COMPETITOR MAP
A COMPETITOR’S EXPANSION PLANS
• 11-
10
ANALYZING COMPETITORS
Share of market
Share of mind
Share of heart
HYPOTHETICAL MARKET STRUCTURE
• 11-
12
EXPANDING THE TOTAL MARKET
New customers
More usage
SIX TYPES OF
DEFENSE STRATEGIES
POSITION DEFENSE
FLANK DEFENSE
COUNTEROFFENSIVE DEFENSE
OPTIMAL MARKET SHARE
FACTORS RELEVANT TO PURSUING INCREASED MARKET SHARE
Encirclement
Bypass Attack
Attack
Guerrilla Warfare
PEPSI BUYS GATORADE IN A BYPASS STRATEGY
GUERILLA MARKETING
SPECIFIC ATTACK STRATEGIES
Counterfeiter
Cloner
Imitator
Adapter
MARKET NICHER STRATEGIES
BALANCING ORIENTATIONS
Competitor- Customer-
Centered Centered
COMPETITOR ANALYSIS
Why Competition?
It indicates
the health of the industry
spurs new product development.
products.
introduce their new variants & even enter new product markets.
always induces firms to revise their product portfolios as also to
•Opportunities in new
markets.
•Development of rural
markets.
•Customer benefits.
FACTORS FOR INTER-FIRM RIVALRY
Low barriers.
Motivation to reduce costs:
Competition motivates firms to reexamine their cost
structures.
Competition is a great leveler so far as product prices
are concerned.
Competitors create a disequilibrium in the market
through the price route.
Competition forces market leader to revisit his cost
structure.
Low barriers:
Low entry and exit barriers in a market, is one of the key
factors driving competition.
Barriers to entry and exit in any market are:
Government Policy.
Costs.
Presence of strong brands.
Customers.
Technology.
Lack of credible competition.
STAGES OF COMPETITION
Competition Competition
for Resources & for existing
opportu Competen
markets
nity cies
Supplier Regulation
Customer Technology
FORMS OF COMPETITION
FUTURE CURRENT
GOALS STRATEGY
COMPETITORS RESPONSE
PROFILE
ASSUMPTION
CAPABILITIES
S
CUSTOMERS PERCEPTION OF COMPETITORS
•Reliabilit •Responsi
y veness
•Assuranc
•Empathy
e
TWO DIMENSIONAL PERCEPTUAL MAPPING
Opportunity
for a new
entrant
A
High Price Competitive
B price
C
Obsolete
technology
COMPETITORS PROFILE ANALYSIS
Background / History.
Business / Product Mix.
Major Corporate Objectives / Strategies.
Recent Trends / Business Developments.
Financial Analysis:
Sales growth.
Profit growth.
Operating margin.
Net margin.
Return on asset.
Return on equity.
Strategic Assessment:
Strengths / Weaknesses.
Strategic directions / management assumptions.
Expected performance / responsive capability.
Implication to company X and company Y.
ALFA ROMEO
DU PONT PROFITABILITY MATRIX
States that operating margin times asset turnover
equals return on assets (ROA).