Competitive StrategiesCompetitive Strategies

Strategic MarketingStrategic Marketing

Who are Competitors?Who are Competitors?Natural CompetitorsNatural CompetitorsResource CompetitorsResource CompetitorsSubstitute ProvidersSubstitute Providers

Natural CompetitorsNatural CompetitorsTwo or more firms in the same Two or more firms in the same

strategic group, making homogenous strategic group, making homogenous (similar) products, targeting the (similar) products, targeting the same customer groupssame customer groups

Examples: Life Buoy, Safe Guard, & Examples: Life Buoy, Safe Guard, & Dettol anti-bacterial soaps Dettol anti-bacterial soaps

Jazz, Ufone, Zong pre-paid packagesJazz, Ufone, Zong pre-paid packages

Resource CompetitorsResource CompetitorsMarketing offers in the same industry Marketing offers in the same industry

which may promise different which may promise different benefits, yet end up creating win-lose benefits, yet end up creating win-lose situations for each other, and hence situations for each other, and hence competing for similar resourcescompeting for similar resources

Examples: Google and Face BookExamples: Google and Face BookA news channel versus an A news channel versus an

entertainment channelentertainment channel

SubstitutesSubstitutesWhere products are different yet Where products are different yet

market offerings (benefits) overlapmarket offerings (benefits) overlapExamples: Petrol and CNG for car Examples: Petrol and CNG for car

ownersownersTea versus CoffeeTea versus Coffee

Strategies for dealing with Strategies for dealing with CompetitionCompetition

Aggressive StrategiesAggressive StrategiesDefensive StrategiesDefensive StrategiesFollower StrategiesFollower Strategies

Aggressive StrategiesAggressive StrategiesFrontal attackFrontal attackEncirclement attackEncirclement attackBypass (Leapfrog) attackBypass (Leapfrog) attackFlanker AttackFlanker AttackGuerilla warfareGuerilla warfare

Frontal AttackFrontal Attack This is a direct head-on assault. It usually This is a direct head-on assault. It usually

involves marshaling all your resources involves marshaling all your resources including a substantial financial commitment. including a substantial financial commitment. All parts of your company must be geared up All parts of your company must be geared up for the assault from marketing to production. for the assault from marketing to production. It usually involves intensive advertising It usually involves intensive advertising assaults and often entails developing a new assaults and often entails developing a new product that is able to attack the target product that is able to attack the target competitors’ line where it is strong.competitors’ line where it is strong.

Examples: Zong, OlpersExamples: Zong, Olpers

Frontal Attack is recommended Frontal Attack is recommended when:when:

the market is relatively the market is relatively homogeneoushomogeneous

brand equity is lowbrand equity is lowcustomer loyalty is lowcustomer loyalty is lowproducts are poorly differentiatedproducts are poorly differentiatedthe attacker enjoys strong resourcesthe attacker enjoys strong resources

Encirclement AttackEncirclement Attack This is a broader but subtle offensive strategy. This is a broader but subtle offensive strategy.

It involves encircling the targeted competitor. It involves encircling the targeted competitor. This is done by introducing a range of This is done by introducing a range of products that are similar to the competitor’s products that are similar to the competitor’s products. Each product will liberate some products. Each product will liberate some market share from the competitor, with the market share from the competitor, with the objective of leaving it weakened, demoralized, objective of leaving it weakened, demoralized, and in a state of siegeand in a state of siege

Omore (against Walls); Toyota (against Ford & Omore (against Walls); Toyota (against Ford & GM); Q-Mobile (against Nokia)GM); Q-Mobile (against Nokia)

Encirclement is recommended Encirclement is recommended when:when:

the market is loosely segmentedthe market is loosely segmented some segments are not being served well some segments are not being served well

by the competitorby the competitor the attacker has strong product the attacker has strong product

development resourcesdevelopment resources the attacker has enough resources to the attacker has enough resources to

operate in multiple segments operate in multiple segments simultaneouslysimultaneously

LeapfrogLeapfrogThis strategy involves bypassing the enemy’s This strategy involves bypassing the enemy’s forces altogether. In the business arena, this forces altogether. In the business arena, this involves either developing new technologies, involves either developing new technologies, or creating new business models. This is a or creating new business models. This is a revolutionary strategy that re-writes the rules revolutionary strategy that re-writes the rules of the game. The introduction of compact of the game. The introduction of compact disc technology bypassed the established disc technology bypassed the established magnetic tape based defenders. The magnetic tape based defenders. The attackers won the war without a single costly attackers won the war without a single costly battle. This strategy is very effective when it battle. This strategy is very effective when it can be realized.can be realized.

Flanker AttackFlanker AttackAvoiding a head-on clash by targeting Avoiding a head-on clash by targeting

a segment where competitor focus or a segment where competitor focus or commitment is weakcommitment is weak

The idea is to catch the competitor by The idea is to catch the competitor by surprise and establishing a “beach-surprise and establishing a “beach-head” by the time the competitor head” by the time the competitor wakes up and reactswakes up and reacts

E.g. Blackberry, Face BookE.g. Blackberry, Face Book

Flanker Attack is recommended Flanker Attack is recommended when:when:

the market is well-segmentedthe market is well-segmented there are some segments that are not well there are some segments that are not well

served by the existing competitorsserved by the existing competitors the target competitor has relatively strong the target competitor has relatively strong

resources and is well able to withstand a resources and is well able to withstand a head-on attackhead-on attack

the attacker has moderate or limited the attacker has moderate or limited resourcesresources

Guerrilla MarketingGuerrilla Marketing The concept of guerrilla marketing was invented as an The concept of guerrilla marketing was invented as an

unconventional system of promotions that relies on unconventional system of promotions that relies on time, energy and imagination rather than a big time, energy and imagination rather than a big marketing budget. Typically, guerrilla marketing marketing budget. Typically, guerrilla marketing campaigns are unexpected and unconventional; campaigns are unexpected and unconventional; potentially interactivepotentially interactive

consumers are targeted in unexpected places. The consumers are targeted in unexpected places. The objective of guerrilla marketing is to create a unique, objective of guerrilla marketing is to create a unique, engaging and thought-provoking concept to generate engaging and thought-provoking concept to generate buzz, and consequently turn viralbuzz, and consequently turn viral

E.g. Road shows, In-mall events, unique E.g. Road shows, In-mall events, unique promotion tactics etc.promotion tactics etc.

Defensive StrategiesDefensive StrategiesCommitted DefenderCommitted DefenderDefensive Flank (Fighter)Defensive Flank (Fighter)Pre-emptivePre-emptiveContractionContraction

Committed DefenderCommitted DefenderAn old, seasoned player in the An old, seasoned player in the

market, with strong commitment of market, with strong commitment of resources, unlikely to give up without resources, unlikely to give up without a staunch defensea staunch defense

Does not involve investing into Does not involve investing into product development or innovations, product development or innovations, but protecting and sustaining the but protecting and sustaining the market sharemarket share

E.g. Jang; State Life Corp of PakE.g. Jang; State Life Corp of Pak

Defensive FlankerDefensive Flanker This involves the re-deployment of resources to This involves the re-deployment of resources to

deter a flank attack. The defender strengthens deter a flank attack. The defender strengthens its flank by deploying more resources. The its flank by deploying more resources. The disadvantage of this defense is that it can disadvantage of this defense is that it can distract the company from its primary objective distract the company from its primary objective and siphon resources away from where they are and siphon resources away from where they are needed most. In business terms, this involves needed most. In business terms, this involves the introduction of new products, product lines, the introduction of new products, product lines, or brands, the defensive re-positioning of or brands, the defensive re-positioning of existing products, or additional promotional existing products, or additional promotional activity in a market nicheactivity in a market niche

E.g. Google Plus; Ptv SportsE.g. Google Plus; Ptv Sports

Pre-emptivePre-emptive““Attack is the best defense”Attack is the best defense”Muscle flexingMuscle flexingSignaling a strong whiplash to competitorsSignaling a strong whiplash to competitorsCovering all possible flanks Covering all possible flanks Creating barriers for competitors through Creating barriers for competitors through

strategic partnerships/alliances with strategic partnerships/alliances with suppliers, distributors or even other suppliers, distributors or even other competitorscompetitors

Gillette; Automobile companies in PakistanGillette; Automobile companies in Pakistan

ContractionContractionAn exit strategy aimed at gradually An exit strategy aimed at gradually

leaving low-profit markets or leaving low-profit markets or segments through divestments, sell-segments through divestments, sell-offs etc.offs etc.

The resources thus saved will then The resources thus saved will then be utilized in other, more profitable be utilized in other, more profitable segments or marketssegments or markets

Market Follower StrategiesMarket Follower StrategiesCounterfeiterCounterfeiter: Makes : Makes

replicas/imitations with no legal cover replicas/imitations with no legal cover or justificationor justification

ClonerCloner: Makes similar, copy cat : Makes similar, copy cat products (e.g. Igloo)products (e.g. Igloo)

Content Follower/NicherContent Follower/Nicher: Remains : Remains confined to a limited segment/niche confined to a limited segment/niche considered unattractive by considered unattractive by competitors (e.g. RC Cola)competitors (e.g. RC Cola)