STRATEGIES BASED ON MARKET Dr Lawrence Poperwi

Midlands State University

POSITION Department of Business
Management
STRATEGIES BASED ON A COMPANY’S MARKET
POSITION

Company market position

Market Market Market Market

Industry Industry Industry Industry
Leader challengers Followers Specialists
 INDUSTRY LEADERS
 Market leaders are often recognizable by the ubiquitous presence of their brand as well as their ongoing
marketing efforts

 Well-known reputation

 Leadership position is usually keyed to a proven strategy

 Strong to powerful market position - A market leader is typically the company holding the largest market share in
a particular industry or segment of an industry

Market leaders never lose sight of the fact that the customer is the most important element to achieving success

Leaders have a clear vision of their direction as well as an effective road map to take them there.

They have the ability to foresee many of the inevitable changes and trends that may impact their operation in the
future
 INDUSTRY LEADERS

 Flexibility - when the inevitable need to change does occur, the market leaders are nimble enough to
make necessary adjustments with as little disruption as possible
 Investing in Employees - market leaders focus on recruiting the best and brightest employees available,
and also invest in their continued development 
 STRATEGY OPTIONS FOR INDUSTRY LEADER
Offensive Strategy

follow offensive strategy to stay a step ahead in the market.

Offensive strategists are always proactive and they undertake competitive action earlier than the
competitors forcing the competitors to become reactive
strategies usually include such actions as:

Relentless pursuit of continuous improvement of products

Continuous innovation for introducing new or better products

Adding unique features in the products

Improving customer service

reducing operating costs

Undertaking initiatives to expand overall demand in the industry through producing new families of
products, discovering new uses of products, attracting new users and promoting more frequent use.
 STRATEGY OPTIONS FOR
INDUSTRY LEADER
 Defensive Strategy
suitable in situations where a company wishes to make most profit out of its present market position.
Such a strategy requires enough capital to spend for strategic actions in order to protect the company’s
ability to compete in the market.
The major objectives of defensive strategy include protecting the present market share, strengthening the
market position and protecting the company’s existing competitive advantages.
Defensive strategy entails a number of defensive actions
•Increasing expenditures for marketing promotion and better customer service
•Introducing more product versions
•Adding customized services that have personal touch of the provider
 STRATEGY OPTIONS FOR INDUSTRY LEADER

•Charging reasonable prices.

•Making product quality attractive to customers.
•Making enough investments for technology development
•Building a strong relationship in the supply chain (especially with suppliers and dealers/distributors).
 MARKET CHALLENGER
 A firm that has a market share below that of the market leader, but enough of a market presence that
it can exert upward pressure in its effort to gain more control.
 Market challengers are able to jockey for industry leadership several ways:
 challenging the market leader on price (direct approach
 increasing product differentiation or improving customer service (indirect approach)
 launching an entirely new product or service in order to change the field (radical approach).
 Market challengers may face a high degree of risk because they must take potentially radical steps in
order to draw away consumers from the market leader
 OBSTACLES FOR MARKET CHALLENGERS

 firms with small market share face obstacles in trying to strengthen their positions

 Less access to economies of scale

 Difficulty in gaining customer recognition

 Inability to afford mass media advertising

 Difficulty in funding capital requirements

 STRATEGIC OPTIONS FOR MARKET
CHALLENGERS
Frontal Attack/direct attack
the market challenger matches with the competitor’s product, price, advertising, and promotion activities
The market challenger can cut the price of the product, provided he convinces the customers that the quality
is not compromised and is as good as the high priced products
Flank Attack
attacking the competitor on its weak points
determine the weak areas of the competitor in terms of two strategic dimensions i.e. Geographic and
segmental.
find the areas where the competitor is under performing and then push its marketing strategies in that area
spot the segments which the competitor left untapped and try to cover that segment through your products
and services
 STRATEGIC OPTIONS FOR MARKET CHALLENGERS
Encirclement Attack
attacking the market leader or a competitor from all the fronts simultaneously
 it is the combination of both the frontal and the flank attack
launch several offensive campaigns forcing the competitor to defend himself from all the sides
simultaneously
Bypass Attack
indirect attack of broadening market share by attacking the easier markets
Expanding into the untapped markets
diversifying into the unrelated products
modernizing the existing product with the invention of technology
 STRATEGIC OPTIONS FOR MARKET CHALLENGERS

Guerrilla marketing
Making small but useful changes, which repeatedly puts your brand in the forefront, and slowly but
surely makes it a huge name in the market
 CONTENT FOLLOWERS

 A company that is not the leading company in a particular market but that chooses

to keep its position rather than competing in a forceful way to increase its share of the market
 A firm that is usually second to the market leader in an industry and wants to hold its share
without upsetting the status quo
 Maintain their market share with much lower investment costs than the leader
 Strategy of product imitation - copy or improve on the new product
 STRATEGIES FOR CONTENT FOLLOWER
Counterfeiter
 duplicates the leader’s product and package and sells it on the black market or through disreputable dealers

 Music record firms, Apple Computer, and Rolex have been plagued with the counterfeiter problem, especially in
Asia

Cloner
 emulates the leader’s products, name, and packaging, with slight variation

Imitator
 Copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, or
location

Adapter
 takes the leader’s products and adapts or improves them

 may choose to sell to different markets, but often the adapter grows into the future challenger
 MARKET SPECIALISTS

 They know their unique attributes that set them apart from their competitors and attract clients to their
offering.
 They have done successful positioning strategy through
Attraction - Provide values and attributes that customers genuinely want or need.
Distinction - Provide values and attributes that customers can receive only when they work with your
business or buy your product.
 They have decided which customers to serve the best. Instead of trying to please all people great brands
please a defined segment of market
 Have found their place in the competitive landscape in terms of how customers think of their offering.
 STRATEGIES FOR MARKET SPECIALISTS

Specialization in the type of a client

Specialization according to the size of a buyer
Specialization in servicing the certain client
Specialization in distribution channel
Geographic specialization
Specialization in quality or price

6/29/2015 Dr S Nhuta