CULIBRA, SHIELA MAY B.

EMS
BSENTOUMN 3-2

Activity 5

1. Explain how having strong competitors can benefit a company?

Competition in the marketplace is good for consumers and good for business. One
important benefit of competition is a boost to innovation. Competition among companies
can spur the invention of new or better products, or more efficient processes.

2. Is being a market follower a good competitive strategy? Discuss the advantages or

disadvantages of being a market follower and the factors to consider when pursuing this
strategy.

A follower can gain many advantages. The market leader often bears the huge
expenses of developing new products and markets, expanding distribution, and
educating the market. By contrast, as with challengers, the market follower can learn
from the leader’s experience. It can copy or improve on the leader’s products and
programs, usually with much less investment. Although the follower will probably not
overtake the leader, it often can be as profitable.

Following is not the same as being passive or a carbon copy of the leader. A market
follower must know how to hold current customers and win a fair share of new ones. It
must find the right balance between following closely enough to win customers from the
market leader and following at enough of a distance to avoid retaliation. Each follower
tries to bring distinctive advantages to its target market—location, services, financing.
The follower is often a major target of attack by challengers. Therefore, the market
follower must keep its manufacturing costs and prices low or its product quality and
services high. It must also enter new markets as they open.

3. Discuss the need to understand competitors as well as customers through competitor

analysis.

A competitive analysis is a strategy where you identify major competitors and research
their products, sales, and marketing strategies. By doing this, you can create solid
business strategies that improve upon your competitor’s.

First, you’ll need to figure out who you’re really competing with so you can compare the
data accurately. What works in a business similar to yours may not work for your brand,
so how can you do this? Divide your “competitors” into two categories: direct and
indirect.

4. List three firms you are familiar with and give a distinctive competence for each firm.
CULIBRA, SHIELA MAY B. EMS
BSENTOUMN 3-2

Google : software engineering and web designing

Tesla : innovation and environmentally friendly

Amazon : fast shipping and efficient distribution

Various firms have their own distinctive competence, which enables them to
compete favorably in the market. Toshiba has got very distinctive competences,
which enable it to have wide customer base. Its major distinctive competence is
its variety products and the flexibility in the productions of its products.

5. Research ‘blue ocean strategy’ and discuss one example of companies that have
succeeded in pursuing this strategy.

Blue Ocean Strategy is referred to a market for a product where there is no competition
or very less competition. This strategy revolves around searching for a business in which
very few firms operate and where there is no pricing pressure.

The first example of blue ocean strategy comes from computer games giant, Nintendo,
in the form of the Nintendo Wii.

The Nintendo Wii launched in 2006 and at its heart is the concept of value innovation.
This is a key principle of blue ocean strategy which sees low cost and differentiation
being pursued simultaneously.

By pursuing value innovation, Nintendo could go beyond competing against the likes of
PlayStation and X-Box in a crowded and fiercely competitive red ocean. Instead, it was
able to open a new market entirely. The Nintendo Wii, with its innovative, new features
and affordable price point, appealed to an entirely new and expansive market a blue
ocean spanning non-gamers, the elderly, and parents with young children.