Week 7 – Creating A Competitive

Advantage
Malani Gunaratnam
 Learning Outcomes

Competitor Analysis
Competitive Strategies
Balancing Customer and Competitor
Orientations
 LO1 - Describe how the world of business is changing
rapidly including the changing needs and expectations

Module Learning of people.

Outcomes LO2 - Describe the environmental influences faced

by business/organisations and their impact on
management and economics, supply and demand,
industrial structure, economies of scale, scope and
experience, the labour market, investment in human
capital and size of firms.
Creating A Competitive Advantge

Competitive marketing
Competitive advantages
strategies are how companies
require delivering more value
analyze their competitors and
and satisfaction to target
develop value-based
consumers than competitors
strategies for profitable
do
customer relationships
Competitors
Analysis
Identifying Your Competitor

Competitor analysis is the process of

identifying, assessing, and selecting key
competitors

Competitors can include:

• All firms making the same product or
class of products
• All firms making products that supply
the same service
• All firms competing for the same
consumer dollars
Competitors
Analysis- Assessing
Competitors

Competitor’s objectives
• Profitability
• Market share growth
• Cash flow
• Technological leadership
• Service leadership

Competitor’s strategies
• Strategic group offers the strongest
competition
Competitors Analysis – Assessing
Competitors
• What can our competitors do?
Compet

• Benchmarking
itor’s
strengt
hs and
weakne
sses

Estimat
ing • What will our competitors do?
compet
itor’s
reactio
ns
Competitors Analysis
Selecting Competitors to Attack and Avoid

Customer value analysis determines the benefits

that target customers’ value and how customers
rate the relative value of various competitors offers.
Identification of major attributes that customers value and
the importance of these values

Assessment of the company’s and competitors’ performance

on the valued attributes

 Strong or weak competitors

 Close or distant competitors
 Good or bad competitor
 Finding uncontested market spaces called blue ocean
strategy
 No direct competitors
Competitors Analysis

Designing A Competitive Design Intelligence

• Identifies competitive information and the best

sources of this information
• Continually collects information
• Checks information for validity and reliability
• Interprets information
• Organizes information
• Sends key information to relevant decision
makers
• Responds to inquiries about competitors
Competitors Analysis

Approaches to Marketing Strategy

Entrepreneurial marketing involves visualizing an
opportunity and constructing and
implementing flexible strategies
Formulated marketing involves developing formal
marketing strategies and following them closely
Intrepreneurial marketing involves the attempt to
reestablish an internal entrepreneurial spirit
and refresh marketing strategies and
approaches
 Michael Porter’s four basic
competitive positioning strategies

Overall cost Middle of the

Differentiation Focus
leadership road
Competitive
Strategy

Overall cost leadership strategy is when a

company achieves the lowest
production and distribution costs and
allows it to lower its prices and gain
market share
Competitive
Strategy

Differentiation strategy is when a

company concentrates on creating a
highly differentiated product line and
marketing programme so it comes
across as an industry class leader
Competitive
Strategy

Focus strategy is when a company focuses

its effort on serving few market
segments well rather than going after
the whole market
 Competitive Strategy

Aspect Cost Leadership Differentiation Focus Focused Differentiation

Definition Focus on being lowest-cost Offer unique products/services Concentrate on serving specific Combine differentiation with
producer while maintaining perceived as superior. market segment or niche. narrow market focus.
quality.

Differentiation Emphasizes cost minimization Focuses on creating distinctive Tailors products/services to meet Offers unique products/services
throughout the value chain. features, attributes, or benefits. distinct needs of target segment. tailored to specific market
segment.

Target Market Broad customer base seeking Customers valuing uniqueness, Narrow customer segment with Niche segment valuing distinctive
affordable options. innovation, or quality. specific demands. offerings.

Value Proposition Providing products/services at Offering superior quality, Providing specialized solutions
lowest prices in market. innovation, or brand value, thus addressing unique requirements,
positioning your company within thereby suggesting a move away
a distinct category in the minds of from a one-size-fits-all approach
users. to a more user-centric delivery
model.
Basic Competitive Strategy
Porter believed that a company that pursued a clear strategy
would achieve superior performance and that
companies without a clear strategy would not succeed

Porter considered no clear strategy to be “middle of the

road”

Michael Treacy and Fred Wiersema suggest companies

can gain leadership positions by delivering superior
value to their customers in three strategies or “value
disciplines:”

• Operational excellence
• Customer intimacy
• Product leadership
Competitive Position

Operational excellence refers to a company providing

value by leading its industry in price and convenience by
reducing costs and creating a lean and efficient value
delivery system

Customer intimacy refers to a company providing

superior value by segmenting markets and tailoring
products or services to match the needs of the targeted
customers

Product leadership refers to a company providing

superior value by offering a continuous stream of
leading-edge products or services. Product leaders are
open to new ideas and solutions and bring them quickly
to the market.
 Competitive Position

01 02 03 04
Market leader Market Market Market nicher
strategies challenger follower strategies
strategies strategies
Competitive
Position

Market leader is the firm with

the largest market share and
Market challengers are firms
leads the market price
fighting to increase market
changes, product innovations,
share
distribution coverage, and
promotion spending

Market nichers are firms that

Market followers are firms
serve small market segments
that want to hold onto their
not being pursued by other
market share
firms
Competitive Market Leader
Expanding Total Demand
Market Challenger Strategies
Challenge the leader with an
Position • Protect Current Market
• Expand total demand
aggressive bid for more market
• Protect their current market share
• Expand market share

Expand market share by: Play along with competitor an

• Increasing profitability with not rock the boat
increasing market share in served
markets
• Producing high-quality products
• Creating good service experiences
• Building close relationships
Competitive Market Follower Strategies
Second mover advantage
Market Nicher Strategies
Ideal market niche is big
Position occurs when a market follower enough to be profitable
observes what has made the with high growth
leader successful and improves potential and has little
on it interest from competitors
Challenges firms its own size or
smaller Key to market niching is
specialisation
• Market
• Customer
• Product
• Marketing mix
 Balancing Companies need to continuously adapt strategies to changes
in the competitive environment
Customer •
•
Competitor-centered company
Customer-centered company
and • Market-centered company

Competitor Competitor-centered company

spends most of its time tracking competitor’s moves and
Orientation •
market shares and trying to find ways to counter them
Advantage is that the company is a fighter
s • Disadvantage is that the company is reactive

Market-centered company spends most of its time focusing

on both competitor and customer developments in designing
strategies
Additional
Resources
https://medium.com/@kolbeuk/an-overview-of-porters-
generic-competitive-strategies-453342d1a6ae

https://www.researchgate.net/publication/352181915_
Porter's_Generic_Competitive_Strategies_and_its_infl
uence_on_the_Competitive_Advantage