Competitive Dynamics Is A Term Used To

Competitive Dynamics
▪ Competitive Dynamics is a term used to

describe a length of actions and reactions of
firms taking part in a competitive business
environment.
Although marketers assume well-known
brands are distinctive in consumers’ minds,
unless a dominant firm enjoys a legal
monopoly, it must maintain constant vigilance.
A powerful product innovation may come
along; a competitor might find a fresh
marketing angle or commit to a major
marketing investment; or the leader’s cost
structure might spiral upward
Hypothetical
Market Structure
Competitive Strategies for
Market Leaders
▪ While expanding total market, a market
leader must continuously defend its
current market share against rivals'
attacks. For example, Coca-Cola guards
its market share against Pepsi-Cola.
To stay number one, the firm must:
✓ First find ways to expand total market
demand.
✓ Second, it must protect its current
share through good defensive strategy.

✓ Third, it should increase market share,
even if market size remains constant.

Expanding the Total Market
▪ When the total market

expands, the dominant
firm usually gains the
most.
▪ The market leader
should look for new
customers or more
usage from existing
customers.
Protecting Market Share
The most constructive response
is continuous innovation
A responsive marketer
Responsive finds a identified need
marketing and fills it.
looks ahead to needs

Anticipative
customers may have
marketing in the near future
Creative discovers solutions customers

did not ask for but to which
marketing they enthusiastically respond
Defense Strategies
The aim of defensive strategy is to reduce

the probability of attack, divert attacks
to less-threatened areas, and lessen their
intensity. Speed of response can make an
important difference to profit
✓ Position Defense: Means occupying the
most desirable market space in consumers’
minds, making the brand almost secure.
✓ Flank (Margin/Edge) Defense: The market
leader should strengthen bases to protect a
weak front or support a possible
counterattack.
✓ Preemptive (Preventive) Defense. A more
aggressive maneuver is to attack first, perhaps
with guerrilla action across the market—hitting
one competitor here, another there—and keeping
everyone off balance. Another is to achieve broad
market envelopment that signals competitors not
to attack.
✓ Counteroffensive Defense: In a
counteroffensive, the market leader can meet the
attacker frontally and hit its flank, or launch a
claw movement so it will have to pull back to
defend itself.
Increasing your market share
Increasing your market share is about
nurturing those relationships and creating
new ones. If you can maintain personal
relationships and enjoy a good conversation
with your customer, you already have what
you need to learn the skills necessary to
increase your market share.
Market Challenger Strategies
Challengers set high aspirations while
market leaders can fall prey to running
business as usual.
Competitive attack strategies available to
challengers
Market Challenger Strategies
▪ Define the strategic objective and

opponents
▪ Choose a general attack strategy
▪ Choose a specific attack strategy
DEFINING THE STRATEGIC
OBJECTIVE AND OPPONENT
A market challenger must first define its
strategic objective, usually to increase
market share. The challenger must decide
whom to attack:
✓ It can attack the market leader.
✓ It can attack firms its own size that are
not doing the job and are underfinanced.

✓ It can attack small local and regional
firms.
CHOOSING A GENERAL
ATTACK STRATEGY
Given clear opponents and objectives,
what attack options are available? We can
distinguish five:
Frontal,
Flank,
Encirclement,
Bypass, and
Guerilla Attacks.
✓ Frontal Attack: In a pure frontal attack, the
attacker matches its opponent’s product,
advertising, price, and distribution. The
principle of force says the side with the greater
resources will win.
✓ Flank Attack: A flanking strategy is another
name for identifying shifts that are causing
gaps to develop, then rushing to fill the gaps.
✓ Encirclement Attack: Encirclement attempts
to capture a wide slice of territory by
launching a grand offensive on several
fronts.
✓ Bypass Attack: Bypassing the enemy altogether to
attack easier markets instead offers three lines of
approach:
➢ diversifying into unrelated products,
➢ diversifying into new geographical markets,
and
➢ leapfrogging into new technologies.
✓ Guerrilla Attacks: Guerrilla attacks consist of

small, intermittent attacks, conventional and
unconventional, including selective price cuts,
intense promotional blitzes, and occasional legal
action, to harass the opponent and eventually
secure permanent footholds.
Product Life-Cycle Marketing
Strategies
▪ A company’s positioning and differentiation
strategy must change as the product, market,
and competitors change over the product life
cycle (PLC). To say a product has a life cycle is
to assert four things:
▪ Products have a limited life.
▪ Product sales pass through distinct stages,
each posing different challenges,
opportunities, and problems to the seller.
▪ Profits rise and fall at different stages of the
product life cycle.
▪ Products require different marketing,
financial, manufacturing, purchasing, and
human resource strategies in each life-cycle
stage.
Profit Life Cycles

Competitive Dynamics Is A Term Used To

Uploaded by

Copyright:

Available Formats

Competitive Dynamics Is A Term Used To

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Competitive Dynamics Is A Term Used To

Uploaded by

Copyright:

Available Formats

Competitive Dynamics

▪ Competitive Dynamics is a term used to

share through good defensive strategy.

even if market size remains constant.

▪ When the total market

looks ahead to needs

Creative discovers solutions customers

The aim of defensive strategy is to reduce

▪ Define the strategic objective and

✓ It can attack firms its own size that are

not doing the job and are underfinanced.

✓ Guerrilla Attacks: Guerrilla attacks consist of

You might also like