Determining Competitive Advantage Internal factors Competition External factors Market Attractiveness Distinctive competences Competitive Strengths Critical success factors After Dahringer and Muelbacher
Market attractiveness • Size of total market • Demand indicators • Growth • Structure - oligopolistic, fragmented, gaps? • Segmentation • needs, purpose, affordability, specialisation • Political/legal barriers
Competitive strengths • Technology • Quality • Image • Market focus • Price
Countering competitorsTerpstra p 171 Three generic strategies - based on Porter • Low cost producer • Differentiated products • Focus • on protected markets • on national loyalty - champions • on under-served segments
Compete or co-operate? • Value-added chain analysis • where does your distinctive competence lie? • Use existing distribution and retail networks? • Offer your product to existing suppliers as an extra part of their range?
Competing in local marketsJohansson (1997) Mature markets eg Europe, US, Japan • aim -compete for market share • identify competitive strengths • focus on fragmenting specialist tastes • exotic value • brand image • customer satisfaction
New Growth Markets Eg Latin America, Central Europe • Aim -participate in growth • Appeal of foreign products/global brands • Focus on minority educated middle-class • Focus on youth markets
Emerging markets • Africa, Eastern Europe • aim - develop new market • first mover advantage • consider counter-trade - payment in kind to set up networks • basic low-cost versions • target small urban elite