Designing Competitive Strategies

• MARKET LEADER STRATEGIES

• MARKET CHALLENGER STRATEGIES
• MARKET FOLLOWER STRATEGIES
• MARKET NICHER STRATEGIES
MARKET LEADER STRATEGIES
WHAT IS A MARKET LEADER?
This firm has the largest market share in the
relevant product market. It usually leads the
other firms in price changes, new-product
introductions, distribution coverage, and
promotional intensity.
Examples: Coca-Cola (soft drinks), Apple
smartphones), Xerox (photocopier), Microsoft
(computer software), Jollibee, Facebook
THREE (3) MARKET LEADER
STRATEGIES
• EXPANDING THE TOTAL MARKET
• DEFENDING MARKET SHARE
• EXPANDING MARKET SHARE
EXPANDING THE TOTAL MARKET

• New Users. Every product class has the

potential of attracting buyers who are
unaware of the product or who are resisting
it because of price or lack of certain features.
• New Uses. Discovering and promoting new
uses for the product.
• More Usage. Convince people to use more
product per use occasion.
 DEFENDING MARKET SHARE
• Position Defense. The basic defense is to build an
impregnable fortification around one’s territory. Coca-Cola
has acquired fruit drink companies and diversified into
desalinization equipment and plastics.
• Flank Defense. The market leader should also establish
outposts to protect a weak front or possibly serve as an
invasion base for counterattack.
• Preemptive Defense. A more aggressive maneuver is to
attack before the enemy starts its offense.
 DEFENDING MARKET SHARE

• Counteroffensive Defense. Most market leaders, when

attacked, will respond with a counterattack.
• Mobile Defense. The leader stretches its domain over new
territories that can serve as future centers for defense and
offense.
• Contraction Defense. Large companies sometimes
recognize that they can no longer defend all of their
territory. The best course of action then appears to be
planned contraction (also called strategic withdrawal).
Planned contraction means giving up weaker territories and
reassigning resources to stronger territories.
 DEFENSE STRATEGIES

(2) Flank

(3) Preemptive (1) (6)

attacker (4) Counteroffensive Position Contraction
DEFENDER

(5)
Mobile
 EXPANDING MARKET SHARE
Some of the common strategies in expanding market share
are as follows:
– customer-knowledge
– long-term outlook
– product innovation
– quality strategy
– line-extension strategy
– brand-extension strategy
– multibrand strategy
– heavy advertising and media pioneer
– aggressive sales force
– effective sales promotion
– competitive toughness HOME
 MARKET CHALLENGER
STRATEGIES
WHAT IS A MARKET CHALLENGER?
Firms that occupy second, third and lower
ranks in an industry which attack the leader
and other competitors in an aggressive bid
for further market share.
 MARKET CHALLENGER
STRATEGIES
Possible Strategic Objectives of a Market
Challenger
• It can attack the market leader.
• It can attack firms of its own size that are not
doing the job and are underfinanced.
• It can attack small local and regional firms.
GENERAL MARKET CHALLENGER
STRATEGIES
• Frontal Attack. The attacker matches its
opponent’s product, advertising, price and
distribution.
• Flank Attack.Can be directed along 2
strategic dimensions - geographical and
segmental. In a geographical attack, the
challenger spots areas where the opponent is
underperforming.In a segmental attack,the
firm will serve uncovered market needs.
GENERAL MARKET CHALLENGER
STRATEGIES
• Encirclement Attack. An attempt to capture a wide slice of
the enemy’s territory. It involves launching a grand
offensive on several fonts.
• Bypass Attack.It means bypassing the enemy and attacking
easier markets to broaden one’s resource base. This strategy
offers 3 lines of approach: diversifying into unrelated
products, diversifying into new geographical markets, and
leapfrogging into new technologies to supplant existing
products.
• Guerilla Warfare. Consists of waging small, intermittent
attacks to harass and demoralize the opponent and
eventually secure permanent footholds. This can include
selective price cuts, and intense promotional blitzes.
 (4) BYPASS ATTACK

(2) FLANK ATTACK

ATTACKER (1) FRONTAL ATTACK

DEFENDER

(3) ENCIRCLEMENT
ATTACK

(5) GUERILLA ATTACK

ATTACK STRATEGIES
 SPECIFIC MARKET CHALLENGER
STRATEGIES
• Price Discount. The challenger offers a comparable product at a
lower price.
• Cheaper Goods. The challenger offers an average- or low-quality
product at a much lower price.
• Prestige Goods. A challenger can launch a high-quality product and
charge a higher price than the leader.
• Product Proliferation. A challenger can attack the leader by
launching a larger product variety, thus giving buyers more choice.
• Product innovation.
• Improved Services.
• Distribution innovation.
• Manufacturing cost reduction.
• Intensive advertising promotion. HOME
 MARKET FOLLOWER STRATEGIES
What is a Market Follower?
Companies that prefer to follow rather than challenge
the market leader.
HOME
FOUR BROAD STRATEGIES:
• Counterfeiter. Duplicates the leader’s product and package
and sells it on the black market or through disreputable dealers.
• Cloner. Emulates the leader’s products, name and packaging
with slight variations.
• Imitator. Copies some things form the leader but maintains
differentiation in terms of packaging, advertising, pricing and
so on.
• Adapter. Takes the leader’s products and adapts and improve
them.
 MARKET NICHER STRATEGIES
What is a Market Nicher?
An alternative to being a follower in a large market is to
be a leader in a small market, or niche. Smaller firms
normally avoid competing with larger firms by
targeting small markets of little or no interest to the
larger firms.
The key idea in nichemanship is specialization.
 MARKET NICHER STRATEGIES
• The following specialist roles are open to nichers:
• End-user specialist. The firm specializes in serving one type of end-use
customer.
• Vertical-level specialist. The firm specializes at some vertical level of the
production-distribution value chain.
• Customer-size specialist. The firm concentrates on selling to either small,
medium-size or large customers.
• Specific-customer specialist. The firm limits its selling to one or a few
customers.
• Geographic specialist. The firm sells only in a certain locality, region or
area of the world.
• Product or product-line specialist. The firm carries or produces only one
product line or product.
• Product-feature specialist. The firm specializes in producing a certain type
of product or product feature.
 MARKET NICHER STRATEGIES
• The following specialist roles are open to nichers:
• Job-shop specialist. The firm customizes its products for individual
customers.
• Quality-price specialist. The firm operates at the low or high quality ends of
the market.
• Service specialist. The firm offers one or more services not available from
other firms.
• Channel specialist. The firm specializes in serving only one channel of
distribution.

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