Competitive Position

Competitive Advantage

Competitor Analysis

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Competitive Marketing Strategies

Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Basics Competitive Strategies Porter's Generic Competitive Strategies (ways of competing):

A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average. The fundamental basis of above average profitability in the long run is sustainable competitive advantage. There are two basic types of competitive u advantage a firm can possess: Pa rts po p low cost or differentiation. Su
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The two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation, and focus. The focus strategy has two variants, cost focus and differentiation focus.
Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Basic Competitive Strategies

1. Cost Leadership
In cost leadership, a firm sets out to become the low cost producer in its industry.

The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. If a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.

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Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Basics Competitive Strategies

2. Differentiation
In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers.

It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price.

r po p Su

u Pa ts

s ato la M

Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Basics Competitive Strategies

3. Focus
The generic strategy of focus rests on the choice of a narrow competitive scope within an industry.

The focuser selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

differentiation focus
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cost focus

Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Basics Competitive Strategies

The focus strategy has two variants.

(a) In cost focus a firm seeks a cost advantage in its target segment

(b) differentiation focus a firm seeks differentiation in its target segment.

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u Pa Both variants of the focus strategy restoon differences between a focuser's target rts p segment and other segments in up industry. The target segments must either S the have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation focus exploits the special needs of buyers in certain segments.
Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Competitive Marketing Strategy (example of a model that a consulting company developed to help marketeers)

Strategic planning has different purposes at different levels of the organization. At the Corporate level, the central purpose is planning for growth. At the level of the Business Unit or Division, the purpose of planning is to identify strategic opportunities for future investment. Once those business opportunities are identified in terms of the organizations key product lines and markets served, the real planning for a sustainable competitive advantage can begin.

s ato Market Value Solutionss (MVS) Value-Based Planning M a Process is designed to answer the key question posed aueach at l ts P level of business planning. At the Corporate level,rthe selected o pp growth options are informed by the tools of customer value Su analysis. At the Business Unit level, the work is done with the
management team to develop a Product/Market Matrix in order to achieve strategic focus. And at the Product/Market level, the work is done with a cross-functional team to identify valuebased, market-driven strategies for a sustainable competitive advantage.
Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Competitive Marketing Strategy

We engage a cross-functional team from the organization in development of the actual competitive marketing plans for two important reasons. First, the valuebased market opportunities typically require changes to the product or service itself, new methods for marketing communications, changes in operations, and/or changes in pricing. Managers from each of those functional areas need to be directly involved with the development of strategies, objectives, and actions for which they will, ultimately, be responsible. Second, the goal of MVS is to teach our way out of the consulting relationship. We do that by providing the planning tools and techniques, then teaching your organizations managers how to use them so that they can develop future competitive marketing plans independently. s ato M u la a sP rt po p Su

Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Competitive Position

Competitive Advantage

Competitor Analysis

r po p Su

u Pa ts

s ato la M

Competitive Marketing Strategies

Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos

Competitor Analysis
1. Identifying Competitors (WHO)

2. Assessing Competitors Determining competitors objectives Identifying competitors strategies Assessing competitors weaknesses strengths and

s Estimating competitors reactions Mato la au P rts o pp 3. Selecting competitors to attack and avoid Su

Strong or weak competitors Close or distant competitors Good or Bad competitors

Competitive Strategy

4. Designing a competitive intelligence system

Marketing_Undergraduated Course Lisbon

Paula Matos

Competitive Positions
Market Leader
Leads in market share but also in innovation and new processes and expands the market

Market Nicher
A company that serves specific segments, small, that the others companies ignore

Market Challenger
Fights hard to increase its market share and sometimes overpass the leader in terms of offer and distribution presence

Market Follower
A runner-up firm in the sector that wants to hold its position without taking the front of the battle neither moving the industry

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In Europe:

Competitive Strategy

Marketing_Undergraduated Course

Lisbon

Paula Matos