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MARKETING STRATEGY

MARKETING STRATEGY. 11 Dealing with Competition. Internal Analysis 1. Analysis of Organizational Strengths and Weaknesses.

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MARKETING STRATEGY

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  1. MARKETING STRATEGY 11 Dealing with Competition

  2. Internal Analysis1. Analysis of Organizational Strengths and Weaknesses • To understand the capabilities of a firm, its internal resources should be analysed in relation to the value they offer to customers. Such an analysis can indicate the areas of strength and weakness of the company and permit the decision makers to take corrective actions in order to protect and maintain the strengths, while trying to reduce weaknesses.

  3. External Analysis 1. Market Threats and Opportunities Possible Threats: • new competitors • A change in consumption patterns • the evolution of technology • New governmental regulations Possible Opportunities: • The development of a new market niche • Governmental intervention for business development in specific industrial sectors • Changes in consumption patterns of the evolution of technology

  4. Porter analysis

  5. Figure 1.1 Five Forces Determining Segment Structural Attractiveness • Potential entrants: High / low entry / exit barriers • Suppliers • Buyers • Industry competitors: aggressive competition – unattractive – barrier of entry • Substitutes: segment is unattractive when there are actual and potential substitutes

  6. Industry Concept of Competition • Number of sellers and degree of differentiation • Entry, mobility, and exit barriers restaurant / airline • Cost structure • Degree of vertical integration • Degree of globalization

  7. Industry Concept of Competition • Pure monopoly: only one firm provides a certain product (e.g. EAC) • Oligopoly: small number of usually large firms • Monopolistic competition: many sellers of differentiated product (e.g. technology) • Pure competition: many competitors offer the same / similar product or service

  8. Analyzing Competitors • Share of market: competitor’s share of target market • Share of mind: percentage of customers who named the competitors – Company that comes to mind • Share of heart: name the company from which you would prefer to buy a product

  9. Other Competitive Strategies • Market challengers: being the leader in the market (e.g. Toyota, Airbus) • Market followers • Market nichers

  10. Competitive Strategies - Market Challenger Strategies • Define the strategic objective and opponents: whom to attack to increase market share • Choose an attack strategy

  11. Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing-cost reduction Intensive advertising promotion Competitive Strategies - Specific Attack Strategies

  12. Competitive Strategies • Market followers: Product differentiation and image are low, service quality is comparable, price sensitivity is high. Companies should try to keep current customers, keep low manufacturing costs, increase product quality and service

  13. Competitive Strategies • Market nichers: be a leader in a small market. Avoid competing with larger firms by targeting smaller market segments which are of no interest of the larger firms

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