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MKTG 4890 Week 4

0. MKTG 4890 Week 4. Competition: Types of Competition Classifying Competitors Intensity of Competition Seeking Competitive Advantage. Understanding Competition. Company Viewpoint. Natural and Strategic Competition. Natural Competition Strategic Competition.

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MKTG 4890 Week 4

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  1. 0 MKTG 4890 Week 4 Competition: Types of Competition Classifying Competitors Intensity of Competition Seeking Competitive Advantage

  2. Understanding Competition Company Viewpoint

  3. Natural and Strategic Competition • Natural Competition • Strategic Competition

  4. Natural Competition: Survival of the Fittest • Two firms doing business the same way in the same market cannot coexist forever

  5. Strategic Competition: Deployment of Resources • Investment in irreversible outcomes • Prediction of output consequences

  6. Sources of Competition • Customer need • Industry competition • Product-line competition • Organizational competition

  7. Factors Contributing to Competitive Rivalry • Opportunity potential • Ease of entry • Nature of product

  8. Factors Contributing to Competitive Rivalry (2) • Exit barriers • Homogeneity of market • Industry structure

  9. Factors Contributing to Competitive Rivalry (3) • Commitment to industry • Technological innovations

  10. Factors Contributing to Competitive Rivalry (4) • Scale economies • Economic climate • Diversity of firms

  11. Achieving Competitive Distinctiveness • Market focus • Product differentiation • Alternative distribution channel • Selective pricing

  12. Competitive Advantage: Two Analytical Tools • Industry analysis: • market attractiveness based on economic structure

  13. Competitive Advantage: Two Analytical Tools • Comparative analysis: • likely future performance of an individual firm in a particular market given the structure of the industry

  14. Porter’s Model of Industry Structure Analysis Potential Entrants Threat of new entrants The Industry Degree of Rivalry Bargaining Power Bargaining Power Suppliers Buyers Threat of substitutes Substitutes

  15. Industry Analysis Market Factors Competitive Factors

  16. Analyzing Competitors • Three Variables to Monitor When Analyzing Competitors: • Share of market • Share of mind • Share of heart

  17. Market Share, Mind Share, and Heart Share

  18. Market nicher Market leader Market challenger Market follower 40% 30% 20% 10% Hypothetical Market Structure & Strategies Expand Market Attack leader Special- ize Imitate Defend Market Share Status quo Expand Market Share

  19. POTENTIAL COMPETITORS • Market Expanders • * Product Expanders • Forward Integrators • Backward Integrators

  20. “Market” Factors for Industry Analysis • Size • Growth • Stage in life cycle • Cyclicity • Seasonality • Marketing mix • Profits

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