MKT 750

COMPETITIVE MARKET
POSITIONS AND
RELATED STRATEGIES

PREPARED FOR: PREPARED BY:

IZFAR ASLAM RAMAN

ASSOC. PROF. DR. FAIZAH ABD RAHIM AHMAD SYAHIR SAFIHI
NORHAFIZAH AZIZAN
NORDIYANA HISHAM
 MARKETING STRUCTURE AND
COMPETITIVE STRATEGY
MONOPOLISTIC
COMPETITION

PURE MARKET STRUCTURES HOMOGINEOUS

COMPETITION OLIGOPOLY
AND COMPETITIVE STRATEGY

MONOPOLY DIFFERENTIATED
OLIGOPOLY
 1. PURE COMPETITION

 Number of sellers: many

 Differentiation of offerings:
 - very little
 - Eg: commodity markets and some fresh food type markets
 Indicated competitive directions:

- cost advantage
- horizontal integration to gain power and dominance in the supply chain through
size and gain cost advantages through economic scale.
- most seller today create differentiation based on providing value added service and
change the market structure to monopolistic competition.
 2. MONOPOLISTIC COMPETITION

 Number of sellers: many

 Differentiation of offerings:
 - differentiated on factors that are important to their specific target market
 - most providers tend to be smaller businesses and serve a particular geographic
market segment
 -more likely to be service based rather than manufactured
 product industries
 - eg: take-away food, hairdressing, accounting
 Indicated competitive directions:

- differentiation based on specific needs of selected target market.

- some sellers will also try to achieve cost advantages through growth and horizontal
integration strategies, particularly franchising.
- strong defensive strategies will be used
 3. HOMOGENEOUS
OLIGOPOLY
 Number of sellers: two to several
 Differentiation of offerings:

- offer basically same product or service

- the capital cost requirements indicates each competitor needs a larger proportion of the market to
cover costs and return profit.
- Eg: petrol industries, pharmaceuticals, movies theatres,
- seller try to create some differentiation between brands which change the market structure from
homogeneous to differentiated oligopoly

 Indicated competitive directions:

 - strategies aimed at creating and sustaining cost advantage are the most logical.
 - growth through globalizes market development
 4. DIFFERENTIATED
OLIGOPOLY
 Number of sellers: two to several
 Differentiation of offerings:
 - partially differentiated on quality, features, price points and image
 - each seller try to become the only provider for a particular point of differentiation
 - each seller needs to achieve a greater market share then they would in monopolistic competition to
cover cost and return profits
 - eg: motor vehicles, processed foods, private school
 Indicated competitive directions:

- strategies aimed at creating and sustaining a desired point of differentiation are essential
- strong branding strategies are used.
- growth achieve through market penetration and market development
- backward or forward integration may also be considered
- defensive strategies combined with growth strategies to prevent loss of market share
- seller need to have cost management strategies that suit the positioning and its offering
such as overall cost leadership strategies.
 5. MONOPOLY

 Number of sellers: one seller per distinct geographic area

 Differentiation of offerings:
 - no close substitute within the geographic area
 - this area may be a country or a smaller geographic locality.
 Indicated competitive directions:

- strategies aimed at cost management

- pursue product development strategies to maintain its market
- strategies aimed at raising barriers to entry through the provision of service and technology
can help deter new entrants
- To be sure they do not abuse their power as seller by maximizing profits through higher
prices and lower service and neglecting customers needs.
 COMPETITIVE POSITION

-Refers to the strength or weakness of and individual business compared to its direct competitors.
-competitive position is calculated in the GE model and can be broadly characterized as strong,
medium or weak.
-Author D. Little, suggest that the competitive position can be grouped into 6 categories

1. DOMINANT 3. FAVOURABLE
The firm controls the behavior of other The firm has a strength that is exploitable in
competitors and has a wide choice of strategic particular strategies and has a more than average
options. opportunity to improve its position

2. STRONG
The firm can take independent action without
endangering its long term position and can
maintain its long term position regardless of
competitors actions.
4. TENABLE
The firm is performing at a sufficiently
satisfactory level to warrant continuing in
business, but it exists at the sufferance of the
dominant company and has a less than average
opportunity to improve its position
 5. WEAK
The firm has un satisfactory performance but an
opportunity exists for improvement and it must
change or exit.

6. NON VIABLE
The firm has un satisfactory performance and no
opportunity for improvement.

The first two regarded as=strong, the middle two =medium and the last two = weak.
Before selecting strategies, attractiveness of the market should also be considered.
Low attractiveness – defensive strategies
High attractiveness – need growth strategies or combination of growth and defensive strategies
 GROWTH STRATEGIES
1. INCREASING SALES WITHIN THE
EXISTING MARKET
• Market penetration
• Increasing share at the expense of
competitors
• Product development
• Differentiation
• Horizontal integration
• Horizontal diversification
3. INCREASING MARKET SEGMENTS
TARGETED
• Market development, geographic or
segment
• Franchising
• Backward or forward integration
2. INCREASING PROFITABILITY WITHIN
THE EXISTING MARKET
• Cost leadership, or at least management
strategies
• Focus
• Backward or forward integration
• Horizontal integration combined with
maximizing efficiencies
• Increasing power relative to buyers or
suppliers
4. MOVING INTO NEW AND DIFFERENT
MARKETS OR INDUSTRIES
• Concentric diversification
• Conglomerate diversification
 DEFENSIVE STRATEGIES

1. PROTECTING EXISTING 2. RETRENCHMENT STRATEGIES TO

POSITION/MARKET SHARE WITHDRAW FROM SOME OR ALL
 Market penetration MARKET SEGMENTS SLOWLY
 Harvesting strategies
 Market development
 Brand equity  Reallocating resources to other
segment/markets when possible
 Product development
 Liquidating remaining stock and non
 Market research transferable resources
 Customer loyalty strategies
 Creation barriers to entry
3. RETRENCHMENT STRATEGIES TO
 Development of sustainable differentiation
WITHDRAW FROM SOME OR ALL
 Targeting of multiple value segments MARKET SEGMENTS QUICKLY
 Selling if buyer can be found
 If not, liquidating where possible and
scrapping where not
*Choice of strategic direction will depend on market
potential, business resources and objective and on
available opportunities .
 MARKETING WARFARE
STRATEGIES

• Defensive : the firm is the dominant force in the market

• Offensive : the firm is the second player in the market

• Flanking : the firm is a smaller player, its strategy must be aimed at increasing
its market share by attacking the flanks of its rival

• Guerrilla : the firm is a minor player , it can , however be successful if it looks

for small segments of the market that have larger players overlook or avoid
 MARKET LEADER
STRATEGIES
1. Expand the whole market

- Attract new user – market penetration,

market development, diversification,
brand equity strategies 2. Expand their market
- Identifying new uses of the product – share
creative research and development
- Increase frequency of use – market - Intensifying distribution
penetration like advertising, promotion - Horizontal distribution
and packaging - Attack competitor using
- frontal attack
- Flanking attack
3.Maintain and defend their - Encirclement
market share - Bypass strategy
- Guerilla strategies
- Maintenance of market share
- Position defense
- Flanking defense
- Pre-emptive defense
- Counter-offensive defense
- Mobile defense
- Contraction defense
 MARKET CHALLENGER
STRATEGIES

1. Attack the market leader

This is usually very risky unless the

attacker is backed up by superior resources 2. Attack businesses of similar size
or the leader is losing prominence
due to poor performance. Size that are not as capable or are poorly
Resourced.

3. Attack smaller business

With fewer resources that are not currently

fully satisfying their customers.
 MARKET FOLLOWER
STRATEGIES

1.Cloner
2. Imitator
-Easiest strategy, but also the most
likely to attract retaliation from A more legitimate version of
strong and aggressive market cloning, where the leader
leader. offering is basically copied, but
-The cloner basically copies the important identifier such as
offering of the market leader, with only packaging and branding are
small changes in packaging but obviously different.
larger changes in quality and sell at
lower price point.

3. Adapter

This business takes the leader

product ideas and adapts them,
often making improvements
that are desired by customers.
  The classifications in marketing warfare terminologies are:

• Market leader : the firm that has the largest share in the relevant product market

• Market challenger: a firm that has a smaller share than the market leader, but may
have relatively large share

• Market follower : a firm that holds a market share smaller than the market leader
but prefer to follow rather than to attack

• Market nicher: a smaller firm that targets segments within segments

 MARKET NICHER

 Characteristic of niche market

-According to the Kotler et al.

• It has sufficient customers with enough purchasing power.

• There is growth potential.

• It is negligible interest to larger competitor in the main market.

• The business has the specialist capabilities and resources to serve the niche in a
superior fashion.
• It can defend itself against attacks from larger competitors through brand equity
and customer loyalty.
 .areas that provide specialist possibilities for business pursuing a niche strategy

• End user specialist

• Vertical level specialist
• Customer size specialist
• Specific customer specialist
• Geographic specialist
• Product or product line specialist
• Job shop specialist
• Quality-price specialist
• Service specialist
• Channel specialist
 CONCLUSION

 Market /competitive position and market structure are significant

factor to consider when considering the business’s strategy
direction.

 To remain profitable, all business need to follow expansion of their

business and their specific customer base.

 Developed as appropriate to the business’s resources, objectives

and capabilities within strategies suggested.
THANK YOU….