Competitive Strategies
Competitive strategies in marketing refer to the methods and approaches used by companies to gain a competitive advantage over their rivals. This can include differentiation, cost leadership, focus strategies, and innovation. By implementing effective competitive strategies, companies aim to position themselves uniquely in the market and attract customers away from their competitors.
8 Key excerpts on "Competitive Strategies"
eBook - ePubMarketing Management
Text and Cases
- Robert E Stevens, David L Loudon, Bruce Wrenn(Authors)
- 2012(Publication Date)
- Routledge(Publisher)
...Evaluating competitors’ strategies allows a business entity to increase or reinforce its understanding of buyer behavior and identify the type of targeted customer. It is also useful in identifying strengths and weaknesses and, consequently, potential market opportunity. The analysis may assist the firm in evaluating whether to position itself as a leader competing head on with other competitors, as a follower with a “me too” strategy, or as a niche performer with a unique strategy tailored for specific strengths and weaknesses and specific market segments. Each major competitor should be studied separately. If this is not possible then the strategy of the closest competitors should be evaluated. In evaluating different competitive approaches the following tasks need to be performed: Review current strategy. Review current performance. Determine strengths and weaknesses. Forecast future strategic possibilities. Analyzing current competitor strategy involves determining how the competitor defines the industry in terms of market segments, product features, marketing mix, manufacturing policy, research and development commitment, growth policy, distribution, and promotion. This analysis can take several forms, but perhaps the most useful is the competitive marketing mix audit. Who are Our Competitors? Major competitors are often easy to identify but some may be overlooked. One way of identifying competitors is to consider the product/market situation. All existing competitors should be identified based on the product/market they are satisfying. For example, a soft drink producer must specify all of the different choice options within the market under which his or her brand will be considered. This would comprise the bulk of the relevant set of competitors and indicates to the marketer that a variety of levels of competition may exist for a company. The most immediate level is brand and item competition...
eBook - ePub- George Stonehouse, Bill Houston(Authors)
- 2003(Publication Date)
- Routledge(Publisher)
...Competitive advantage can arise both from planned strategies and from opportunistic moves by the business – sometimes called emergent strategies. Competitive advantage is not easy to achieve and is even more difficult to sustain. Superior performance is built and sustained through continuous organizational learning and results in a constant process of new strategy development and improvement in the way in which business activities are carried out. The rapid pace of technological, political, economic and social change, the increasing turbulence of the business environment, the growing sophistication of customer needs and the drastic shortening of product life cycles that typifies ‘hypercompetition’, all mean that competitive advantage is often contestable rather than sustainable. In other words, the search for strategies that produce and sustain superior performance over a long period of time has become increasingly difficult. Competitive advantage can only be developed and sustained through the creation of new business knowledge based upon continuous organizational learning. In Chapter 1 of this book, we learned that the different strands of theory in strategic management offer several explanations and potential methods by which competitive advantage can be achieved. The ‘competitive positioning’ explanation is based largely upon Porter's five forces, generic strategy and value chain frameworks (Porter, 1980, 1985) which have been subsequently augmented by the concept of a hybrid strategy. For Porter, the first question to be answered was: In which industry should the business compete? Potential industry profitability, and hence attractiveness, was established through five forces analysis. Once the choice of industry was made, the organization then had to determine which generic strategy to pursue, and then to decide the optimum configuration of its value-adding activities to support the chosen generic strategy...
eBook - ePubInternational Brand Strategy
A Guide to Achieving Global Brand Growth
- Sean Duffy(Author)
- 2021(Publication Date)
- Kogan Page(Publisher)
...This makes it even more difficult for you to rally. High strategy and low local competitors: quick gains, caught off-guard the locals will struggle to catch up, providing you with even more time to fortify your position and make it even more difficult for rivals to overtake you. High strategy and high local competitors: test of equals, you will slug it out with the locals on a strategic level. Unlike fighting with tactics, this contest will force you to sharpen your strategy and will eventually yield a clear winner. Before deciding on a competitive strategy, it’s a good idea to take stock of your company’s strengths and weaknesses in relation to the brands with whom you will be competing and the buyers to whom you will be selling in the foreign market. In his seminal book Competitive Strategy, 1 Michael Porter of Harvard Business School introduced the three basic strategic options with which to compete: Price: How price sensitive are buyers in this category? Does your company have lower production costs than other companies with similar offers in the market? Could you sustain that advantage? If that is the main strength of your business, then you should consider a cost minimization strategy where you compete across the category with a lower cost structure allowing you to offer lower prices. Differentiation: Do buyers in this category have underserved needs that your brand could address? Does your company have a product offer that is truly unique in a way that is valued by those buyers and difficult for rivals to copy? Could you sustain that advantage? If that is your company’s main strength, then you should consider a product differentiation strategy where you compete across the category with your value offer. Niche: Is there a distinct segment of buyers in this category that have underserved needs and is large enough to support your business? Does your company possess a unique product or particular credentials that, although not of great interest to the broader category, is highly valued by this segment of...
eBook - ePubBusiness Planning for New Ventures
A guide for start-ups and new innovations
- David Butler(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...In practice, many businesses use a combination of these, for example, by combining product differentiation with price or quality strategies; i.e. selling the product USPs in combination with competitive pricing and/or a particular quality or value for money emphasis. Developing a cohesive marketing strategy The marketing strategy for any product or service is aimed at defining how the market penetration process will be carried out, formulating the marketing mix to establish the most appropriate mixture of product or service characteristics and ways in which these will be supplied and presented in order to maximise the potential value and interest to the target groups of customers that were identified in the market research process; and developing a sales plan to define the range of sales activities that will be used. Market penetration Although Johnson and Scholes’ three generic strategies for competitive advantage are designed to facilitate market entry, market penetration can also be achieved by using the findings from market research to identify and develop other opportunities. The downside of using of Cost Leadership as a market penetration strategy is that whilst lower production or distribution costs might enable a company to offer lower prices in order to break into the market, once a company gets a reputation for pitching its prices low it might be hard to raise the prices back to normal market levels without losing customers, so ideally the competitive pricing strategy needs to be linked with some other benefit to the customer, like emphasising a higher quality aspect as a differentiating factor. Similarly, in Differentiation strategies the downside to any differential advantages gained through innovation is that unless innovation becomes a continuous process the competition may eventually catch up or come up with its own breakthrough innovation...
eBook - ePubStrategy-specific Decision Making: A Guide for Executing Competitive Strategy
A Guide for Executing Competitive Strategy
- William G. Forgang(Author)
- 2015(Publication Date)
- Routledge(Publisher)
...However, this introductory section highlights two characteristics. First, strategic leaders are visionary. 4 Strategic leaders recognize a firm’s strengths, weaknesses, opportunities, and threats and creatively design an effective competitive strategy. The second characteristic is the ability of strategic leaders to execute the strategy by focusing upon the details of a firm’s operations. 5 A complex organization cannot rely upon a single strategic leader. Vision and decision-making skills are needed at all levels of an organization. Though firms do not choose a competitive strategy through democratic practices, all must understand the strategy and link the details of their day-to-day activities and decisions to the requisites of strategy implementation. 6 Summary This opening chapter introduces the reader to key ideas that are developed in the following chapters. The design stage of the strategic management process leads to the definition of a firm’s competitive strategy. The strategy specifies the particular weighted mix of price, product features and qualities, and price that differentiates a product or service from rivals. The execution stage of the strategic management process implements the strategy through the multitude of decisions that are made across a business and over time. Strategy-specific decision making relies upon filtering options through a strategic lens, and strategy-specific choices effectively execute the firm’s strategy. Key Themes and Terms Competitive Strategy: A firm’s competitive strategy for a single product or narrow group of products is defined by the particular mix of price, product features and quality, and service that distinguishes its good or service from those of rivals. (See 5 – 7.) External Analysis: External analysis assesses the political, social, technological, and economic environments within that the firm operates and which affect the firm’s financial performance...
eBook - ePub- Kenneth M. Eades, Timothy M. Laseter, Ian Skurnik, Peter L. Rodriguez, Lynn A. Isabella, Paul J. Simko(Authors)
- 2010(Publication Date)
- Wiley(Publisher)
...9 Strategy—Defining and Developing Competitive Advantage The purpose of business is to create value for people, including customers, shareholders, employees, and communities. Strategy defines the purpose, intent, and mission of the firm—how it aims to create value. Sustained superior returns require a clear and well-communicated vision of how the firm creates value. Leaders have a critical role in defining and clearly communicating these goals and in demonstrating commitment, courage, and resolve. Jim Collins’s study of firms with extraordinary performance over a sustained period of time found that leadership is critical, but perhaps not in the ways that are usually assumed. Superb leadership is characterized not by power and charisma, but by humility and firm resolve. Consistent with this finding, strategy development requires the firm’s leaders, at all levels, to understand the firm’s core values and to continually look hard at how to be ever more unique and valuable and how to stay true to not only to the firm’s mission, but to what the firm does not do. This chapter looks at the strategy development process, which provides frameworks and questions that leaders throughout the firm can use to design and improve strategy and performance. Strategy overlaps well with marketing; see also Chapter 4 on marketing management. What Is Strategy? Firms strive for sustained, superior return on investment. Superior returns, relative to other competitors in the industry, require a sustainable competitive advantage (that is, a way of providing value to customers that is unmatched by competitors). Sustained profits require investment in capabilities that enable the advantage to improve, renew, and change. Strategy, therefore, is concerned with the definition of competitive advantage and the development of activities, resources, and capabilities that enable the firm to sustain advantage in a changing world...
eBook - ePubHow to Develop a Strategic Marketing Plan
A Step-By-Step Guide
- Norton Paley(Author)
- 2017(Publication Date)
- Routledge(Publisher)
...IV Checklists for Developing Competitive Strategies 4 Checklists for Developing Competitive Strategies Given the information in this chapter, you should be able to: Develop a competitive advantage analysis. Conduct a competitive strategy analysis to improve the performance of your Strategic Marketing Plan (SMP). Assess the condition of your marketing capabilities by using a marketing audit. Overview "The plan is nothing; planning is everything." Dwight D. Eisenhower The insightful quote above indicates that masterminding, strategizing, and implementing are the driving forces behind the effectiveness of your SMP. A number of aids in the form of checklists and a marketing audit can assist you in those efforts. Developing Competitive Strategies There are two parts to developing Competitive Strategies and thereby improve the credibility of your SMP: Part I: Competitive Advantage Analysis The first part consists of a comprehensive checklist to analyze the strengths and weaknesses of your company vs. those of your competitors in the key areas of the marketing mix (product, price, distribution, and promotion). While the factors for rating strengths and weaknesses are applicable to most companies and product lines, you may find it useful to edit the list and customize it with precise factors pertinent to your business and industry. The intent of the analysis is to (1) determine where there are opportunities to attack the weaknesses of competitors, and (2) expose potential weaknesses through which competitors can devise strategies against you. Part II: Competitive Strategies Analysis The second part consists of a more expansive group of checklists to help you determine competitors' strategies. Accordingly, the analyses warrant more interpretation, judgment, and insight than Part I. Here, your intent is to dig behind the mere facts and determine the patterns of competitors' behavior...
eBook - ePubEntrepreneurial Marketing
How to Develop Customer Demand
- Edwin J. Nijssen(Author)
- 2021(Publication Date)
- Routledge(Publisher)
...They are convinced that their product’s new features make it superior. However, even though competing products may not look the same or function identically, customers may still consider them alternatives. By identifying and analysing alternatives and competitors carefully, the entrepreneur can determine why and when some customers prefer one alternative over the other. This analysis of competitive products enables better marketing decisions. Whether customers think your new product is better than the existing ones on the market depends on their specific needs and how well each application is able to satisfy these needs. Often, there are multiple products in the marketplace at the same time. For instance, there are electrical and petrol hedge trimmers. By developing a detailed view of the evolving market and its products (based on different technologies), you can gain a good understanding of market dynamics. For example, consumers who infrequently trim small hedges close to their houses will prefer a light machine but not mind an electrical cord, whereas professional gardeners trimming many, large hedges probably prefer, and require, the mobility of a petrol trimmer. Based on market trends, and changes in market share between competitors, underlying competitive dynamics can be identified and understood, and new market opportunities identified. Marketers distinguish between different levels of competition. First, they distinguish between need and product (including brand) competition (see Table 5.1). Need competition refers to the fact that sales of substitutes influence each other. Substitutes look and feel different but can satisfy the same customer need. An example is teleconferencing versus air travel. Both can facilitate exchange of business information or business meetings...
