Creating Competitive Advantage Chapter: 18 Lec: 10

Competitive Positions Market Leader The firm in an industry with the largest market share Market Challenger A runner-up firm that is fighting hard to increase its market share in an industry Market Follower A runner-up firm that wants to hold its share in an industry without rocking the boat Market Nicher A firm that serves small segments that the other firms in an industry overlook or ignore

Market Leader Strategies Lead the other firms in price changes, new product instruction, distribution etc. Members and heads of the chamber of commerce e.g. Google, Mobilink, Microsoft, Tata Motors, McDonalds Leaders have to be vigilant or they’ll lose their position

Leader Challenges Apple’s Ipod Sony's’ Walkman

Leaders Challenges

Market Leader Strategies Three strategies which a market leader can follow 1) Expanding the Total Demand 2) Protect Current market share 3) Expand market Share

Market Leader Strategies Expanding the Total Demand - Develop new users, new uses, more usage

New Users

New Uses

More Usage

Protecting Market Share They have to guard their share e.g. Mobilink against Telenor Pizza Hut against Domions - Keep competitors happy - Continuous innovation

Expanding Market Share Profitability rises with increasing share when unit cost falls

Market Challenger Strategies E.g. Telenor, Zong in Pakistan Which competitors to challenge Frontal attack…same product, price, advertising, distribution, Telenor targeted the rural market

Market Follower Strategies Not all runner up companies want to challenge market leader It can copy and improve leader’s product with less investment

Market Nicher Strategies Specializing in serving specific markets Normally Smaller firms Mass marketer achieves high volume, the Nicher achieves high margins E.g. Rainbow Vacuum Cleaner E.g. Salt n Pepper Village

Salt n Pepper Village

Balancing Customer and Competitor Orientations Competitor-centered company A company whose moves are mainly based on competitors’ actions and reactions Customer-centered company A company that focuses on customer developments in designing its marketing strategies and on delivering superior value to its target customers.

Balancing Customer and Competitor Orientations Market Centered company A company that pays balanced attention to both customers and competitors in designing its marketing strategies

Evolving Company Orientations Product orientation Competitor orientation Customer orientation Market orientation No Yes Customer- centered Competitor centered