Marketing Strategy MKT 460. Competitor Analysis & Creating Sustainable Competitive Advantage Taufique Hossain. “If you don’t have a competitive advantage, don’t compete” Jack Welch, GE. Key Questions in Marketing Strategy. Where? In which markets are we competing?
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Marketing StrategyMKT 460 Competitor Analysis & Creating Sustainable Competitive Advantage TaufiqueHossain
“If you don’t have a competitive advantage, don’t compete” Jack Welch, GE
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.
Sources of Competitive Advantage • Cost leadership • Differentiation • Focus
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)
Changing the Value Perspective: Advantages at the Product Level High Relative Offering vs. Key Competitors Us Low Factor 1 Factor 8 Factor 9 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Factor 7 Factor 10 Key Factors of Product, Service, and Delivery
Changing the Value Perspective: An Example High Relative Offering vs. Key Competitors Competitor2 Us Low Competitor 1 Eating Facilities Price 24-Hour Reception Room Amenities Silence Lounge Hygiene Room Size Bed Quality Architecture Key Factors of Product, Service, and Delivery
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)
New Value Proposition Example High Competitor2 Relative Offering vs. Key Competitors Us Competitor 1 Low Eating Facilities Price 24-Hour Reception Room Amenities Silence Lounge Hygiene Architecture Room Size Bed Quality Key Factors of Product, Service, and Delivery
Competitor Capabilities Key success factors Self: total 5 Competitor A: total 6 Key success factors Competitor B: total 4 Competitor C: total -2
Advantage Creating Resources • Contribute to providing value for customers • Are unique to firm • Are hard for competitors to acquire or imitate Sustainable Competitive Advantage
Generic Routes to competitive advantage creation Customer valued uniqueness High Cost relative to competitors Average Low Average Low High
Sustaining competitive Advantage • Unique & valued products • Clear, tight definition of market targets • Enhanced customer linkages • Established brand & company credibility.
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
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
Strategies for Market Followers • Counterfeit • Cloner • Imitator • Adapter
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.
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, 121-146. • Treacy and Wiersema (1993), ‘Customer Intimacy and Other Value Disciplines’, Harvard Business Review, January-February, 84-93. • Kim and Mauborgne (1997), ‘Value Innovation: The Strategic Logic of High Growth’, Harvard Business Review, January-February, 103-112.