1. Marketing Strategy MKT 460
Competitor Analysis & Creating Sustainable Competitive Advantage
Taufique Hossain

2. “If you don’t have a competitive advantage, don’t compete”
Jack Welch, GE

3. Key Questions in Marketing Strategy
Where?
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.

4. Sources of Competitive Advantage
Cost leadership
Differentiation
Focus

5. Advantages of Companies: A Different View
Product Leadership
best product
Product Differentiation
Operative Competence
Customer Orientation
Operational Excellence
best total costs
Customer Intimacy
best total solution
Treacy and Wiersema (1993)

6. Changing the Value Perspective: Advantages at the Product Level
High
Relative
Offering
vs. Key
Competitors Us
Low
Factor 1
Factor 2
Factor 3
Factor 4
Factor 5
Factor 6
Factor 7
Factor 8
Factor 9
Factor 10
Key Factors of Product, Service, and Delivery

7. Changing the Value Perspective: An Example
High
Relative
Offering
vs. Key
Competitors
Competitor 2 Us
Low
Competitor 1
Eating
Facilities
Lounge
24-Hour
Reception
Room
Amenities
Silence
Price
Hygiene
Architecture
Room Size
Bed Quality
Key Factors of Product, Service, and Delivery

8. Four Steps to a New Value Proposition
Reduce
What factors should be
reduced well below the
industry standard?
Eliminate
What factors should be
Eliminated that the industry has taken for granted?
Raise
What factors should be raised well beyond the industry standard?
New Value
Proposition
Create
What factors should be
created that the industry has never offered ?
Kim and Mauborgne (1997)

9. New Value Proposition Example
High
Competitor 2
Relative
Offering
vs. Key
Competitors Us
Competitor 1
Low
Eating
Facilities
Lounge
24-Hour
Reception
Room
Amenities
Silence
Price
Hygiene
Architecture
Room Size
Bed Quality
Key Factors of Product, Service, and Delivery

10. Learning from Competitors

11. Components of Competitor Analysis

12. Competitor Objectives

13. Competitor Strategies

14. Competitor Resources

15. Competitor Capabilities
Key success factors
Self: total 5
Competitor A: total 6
Financial strength
Staying power
Strong R&D
Technological breadth
Quick response capability
European marketing -2 -1 1 2 -2 -1 1 2
Key success factors
Competitor B: total 4
Competitor C: total -2
Financial strength
Staying power
Strong R&D
Technological breadth
Quick response capability
European marketing -2 -1 1 2 -2 -1 1 2

16. Future Competitor Strategies

17. Advantage Creating Resources
Contribute to providing value for customers
Are hard for competitors to acquire or imitate
Are unique to firm
Sustainable Competitive Advantage

18. Generic Routes to competitive advantage creation
Market advantage Financial disadvantage
Market advantage
Market & Financial advantage
Financial disadvantage
Stuck in the middle
Financial advantage
Market & Financial disadvantage
Market disadvantage
Market disadvantage Financial advantage
Customer valued uniqueness
High
Cost relative to competitors
Average
Low
High
Average
Low

19. Cost Drivers Costs Economies of Scale Experience Capacity Utilization
Linkages
Inter-elationship
Integration
Timing
Policy Choices
Location
Institutional

20. Uniqueness Drivers Uniqueness Product Differentiation
Price Differentiation
Distribution Differentiation
Brand Differentiation
Promotional Differentiation

21. Sustaining competitive Advantage
Unique & valued products
Clear, tight definition of market targets
Enhanced customer linkages
Established brand & company credibility.

22. Hypothetical Market Structure

23. Strategies for Market Leader
Expanding Total Market
New Customer
More Usage
Defending Market Share
Position Defense
Flank Defense
Preemptive Defense
Counteroffensive Defense
Mobile Defense
Contraction Defense
Expanding Market Share

24. Strategies for Market Challenger
Defining the strategic objective and opponents
Attack the market leader
Attack firms of its own size
Attack small local & regional firms
Choosing general attack strategy
Frontal Attack
Flank Attack
Encirclement Attack
Bypass Attack
Guerilla Warfare
Choosing specific attack strategy

25. Strategies for Market Followers
Counterfeit
Cloner
Imitator
Adapter

26. Strategies for Market Nichers
Choosing the battleground
Focusing Effort
Ability to segment the market
Efficient use of R&D resources
Thinking Small
Create, Expand & Protect.

27. Reading Hooley 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,
Treacy and Wiersema (1993), ‘Customer Intimacy and Other Value Disciplines’, Harvard Business Review, January-February,
Kim and Mauborgne (1997), ‘Value Innovation: The Strategic Logic of High Growth’, Harvard Business Review, January- February,