 Addressing Competition and

Driving Growth

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A parking lot at Boeing Field in Seattle, Washington,
filled with undelivered Boeing 737 MAX aircraft

5/23
 Most Expensive Mistake in the Aviation
history that cost US $ 20 Billion
 In January 2020, with 400 aircraft awaiting certification and
delivery, Boeing suspended production of the MAX until May
2020.
 By March 2020, the grounding had cost Boeing $18.6 billion
in compensation to airlines and victims' families, lost
business, and legal fees.
 Airlines and leasing companies that once struggled without
the MAX had cancelled nearly 800 orders of the MAX by
September 2020, months into the COVID-19 pandemic.
 On July 1, Boeing completed several days of certification
flights.
 In August, the FAA published details of changes related to
aircraft defects and pilot training to be mandated before the
MAX returns to service.
 On November 18, 2020, the FAA cleared the MAX to return
to service.

6/23
 How many units were grounded?

 Source#1: Approximately 790 (400 @ Boeing

Ends+393 Airlines End) aircraft are currently
grounded, some have been delivered to
operators, some are being held back by
Boeing, post production.
 Source#2: Nearly 400 Max jets were in
service worldwide when they were grounded,
and Boeing has built and stored about 450
more since then. All have to undergo
maintenance before they can fly.

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 Designing Competitive Strategies

Hypothetical
Market Structure

Designing Competitive Strategies 1/1 12/23

July 20, 2018

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Aug 2, 2018

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Jan 2019

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Feb 11, 2019

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 Feb 19, 2019

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 Airtel Citycell Teletalk

GP
BLINK
GP
ROBI ROBI
Airtel
Citycell
Teletalk
BLINK

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 Growth

 An important function of marketing is to

drive growth in sales and revenue for a
company

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 Growth Strategies

 Grow by building your market share

 Grow by developing committed customers and stakeholders
 Grow by building a powerful brand
 Grow by innovating new products, services, and experiences
 Grow by international expansion
 Grow by acquisitions, mergers, and alliances
 Grow by building an outstanding reputation for social
responsibility
 Grow by partnering with government and NGOs

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 1. Competitive Strategies for Leader
 Market-Leader Strategies
 Expanding the Total Market
 New Users
 Market-penetration strategy (Those who might use it but do
not)
 New-market segment strategy (Who never use it)
 Geographical-expansion strategy (Those who live
elsewhere)
 New Uses
 More Usage (by quantity of consumption or frequency of consumption)

 Defending Market Share

 Premium Performance: CAT produces high quality of pdts
 Extensive dealership: Largest number of dealership
 Superior service: World wide parts and service system
 Full-line strategy: Full line of construction equipment
 Good financing: Offering good terms to their customers
4. Competitive Strategies for Leader 1/4 29/23
 Caterpillar

4. Competitive Strategies for Leader 2/4 30/23

 Human Labor

Excavator
4. Competitive Strategies for Leader 3/4 31/23
 Protecting Market Share

 Continuous Innovation
 PROACTIVE MARKETING

 A responsive marketer finds a stated

need and fills it.
 An anticipative marketer looks ahead to
needs customers may have in the near
future.
 A creative marketer discovers solutions
customers did not ask for but to which
they enthusiastically respond. Creative
marketers are proactive market-driving
firms, not just market driven ones.

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 1. Competitive Strategies for Leader
 DEFENSIVE STRATEGIES
 Position Defense (Most desirable market space; Crest for cavity P&G)
 Flank Defense (Protect the weak front or sides for counter attack)
 Preemptive/done before others can act Defense (Attack before enemy start its
offense)
 Counteroffensive Defense (When attacked the respond with counter attack)
 Mobile Defense
 Market broadening (Oil Co. for coal, nuclear, hydroelectric etc.)
 Market diversification (Shifting to unrelated industry)
 Contraction Defense
 Planned contraction (Strategic withdrawal)

4. Competitive Strategies for Leader 4/4 33/23

 Increasing Market Share
 The possibility of provoking antitrust
action/legal action
 Economic cost.
 The danger of pursuing the wrong
marketing activities.
 The effect of increased market share
on actual and perceived quality

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Significant Market Power “SMP” (June 22, 2020)

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2. Competitive Strategies for Challenger

 Market-Challenger Strategies
 Defining Strategic Objective & Opponent(s)
 It can attack the market leader (Canon grabbed Xerox
with desk copier)

 It can attack firms of its own size that are not doing
the job and are underfinanced (firms charging excessive
price or not satisfying customers)

 It can attack small local and regional firms

 Choosing a General Attack Strategy

5. Competitive Strategies for Challenger 1/4 36/23

 By passing enemy attacking easier markets (PepsiCo
bought Tropicana; orange juice Next Slide Pic
Geographic or
segmental
Attackers matches opponents
products, advertising, price and
distribution

With superior
resources &
believes to break the
will of opponent

Selective price cut, Intense promotional blitzes

/concentrated effort & occasional legal action
5. Competitive Strategies for Challenger 2/4 37/23
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2. Competitive Strategies for Challenger

Choosing a Specific Attack Strategy

 Price-discount
 Lower price goods
 Prestige goods
 Product proliferation (larger product variety)
 Product innovation
 Improved services
 Distribution innovation (Avon door to door selling)
 Manufacturing cost reduction
 Intensive advertising promotion

5. Competitive Strategies for Challenger 4/4 40/23

 3. Competitive Strategies for Follower
Innovative imitation (Product imitation)
Product innovation

Four Broad Strategies:

Counterfeiter (duplicates the leaders product & sell in black market )
Cloner (Pdts, name & packaging with slight variation)
Imitator (copies something from the leader but maintains differentiation)
Adapter (takes leaders products and adapts or improves them)

6. Competitive Strategies for Follower 1/1 41/23

Nicher

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Big Toyz Racing Motors (BTR), the premier custom fabricator of the world's longest
monster truck and luxury 4x4 vehicles, announced today that the Sin City Hustler the
world’s first and only million dollar monster truck is now being made available to the
public

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 4. Competitive Strategies for Nicher
High margin (nicher) vs high volume (mass marketer)
Nicher Specialist Roles

7. Competitive Strategies for Nicher 1/1 45/23

 4. Competitive Strategies for Nicher
Nicher Specialist Roles

7. Competitive Strategies for Nicher 1/1 46/23

 Product Life-Cycle Strategies

 Product life-cycle (PLC) is the

course that a product’s sales
and profits take over its
lifetime.
 Product development
 Introduction
 Growth
 Maturity
 Decline

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 Product Life-Cycle Strategies

Sales and profits over the product’s life from inception to decline
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 Product Life-Cycle Strategies

Product life-cycle (PLC) can describe a

product class, a product form, or a
brand
 Product classes/category have the
longest life cycles, with sales of many
product classes in the mature stage for
a long time. (gasoline powered
automobiles/hair care)
 Product forms have the standard PLC
shape: introduction, rapid growth,
maturity, and decline. (SUV/hair oil)
 Brands have changing PLCs due to
competitive threats. (Nissan Patrol)

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Common Product Life-Cycle Patterns

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 Product Life-Cycle Strategies
Product life-cycle (PLC) can also be applied
to styles, fashions and fads
 Style is a basic and distinctive mode of
expression.
 Fashion is a currently accepted popular
style in a given field.
 Fads are temporary periods of unusually
high sales driven by consumer enthusiasm
and immediate product or brand popularity.

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 Product Life-Cycle Strategies

Introduction stage is when the

new product is first launched.
 Takes time
 Slow sales growth
 Little or no profit
 High distribution and
promotion expense

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 Product Life-Cycle Strategies
Growth stage is when the new product satisfies
the market.

 Sales increase  Product quality

 New competitors enter increases
the market  New features
 Price stability or decline  New market
to increase volume
segments and
 Consumer education distribution
 Profits increase channels are
 Promotion and entered
manufacturing costs
gain economies of scale
55/23
 Product Life-Cycle Strategies

Maturity stage is a long-lasting stage of a

product that has gained consumer
acceptance.
 Slowdown in sales
 Many suppliers
 Substitute products
 Overcapacity leads to competition
 Increased promotion and R&D to support
sales and profits.
Marketers consider modifying strategies at
the maturity stage
 Market modifying
 Product modifying
 Marketing mix modifying
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 Product Life-Cycle Strategies
 Market modifying is when a company tries to
increase consumption of the current product (New
users; Increase usage of existing users; New
market segments)
 Product modifying is changing characteristics
(quality, features, or style) to attract new users
and to inspire more usage.
 Marketing mix modifying is when a company
changes one or more of the marketing mix
elements.
 Price
 Promotion
 Distribution channels

57/23
 Product Life-Cycle Strategies

 Decline stage is when sales decline or

level off for an extended time, creating a
weak product.
 Maintain the product without change in
the hope that competitors leave the
industry
 Reposition or reformulate the product in
hopes of moving back into the growth
stage
 Harvest the product that means
reducing various costs and hoping that
sales hold up
 Drop the product by selling it to another
firm or simply liquidate it at salvage
value 58/23
 Marketing in a Slow-Growth Economy

 Explore the Upside of Increasing Investment

 Get Closer to Customers
 Review Budget Allocations
 Put Forth the Most Compelling Value Proposition
 Surgical Strategy/Approach
 Fine-Tune Brand and Product Offerings

59/23