Strategies for Dealing with Competition: Strategies for Dealing with Competition Professor Charles D. Schewe


Objectives: Objectives Identifying Competitors Evaluating Competitors Competitive Intelligence Systems Competitive Strategies Customer vs. Competitor Orientation


Slide3: Induce your competitors not to invest in those products, markets and services where you expect to invest the most … that is the fundamental rule of strategy. Bruce Henderson, Founder of BCG There is nothing more exhilarating than to be shot at without result. Winston Churchill


Five Forces Determining Segment Structural Attractiveness: Five Forces Determining Segment Structural Attractiveness


Barriers and Profitability: Barriers and Profitability Low, risky returns


Industry Competition: Industry Competition Number of Sellers - Degree of Differentiation Entry, Mobility, Exit barriers Cost Structure Degree of Vertical Integration Degree of Globalization


Strategic Groups in the Major Appliance Industry: Strategic Groups in the Major Appliance Industry Group A Narrow line Lower mfg. cost Very high service High price Group D Broad line Medium mfg. cost Low service Low price Group C Moderate line Medium mfg. cost Medium service Medium price Group B Full line Low mfg. cost Good service Medium price


Analyzing Competitors: Analyzing Competitors


Competitor’s Expansion Plans: Competitor’s Expansion Plans Markets Products


Hypothetical Market Structure & Strategies: Hypothetical Market Structure & Strategies Expand Market Defend Market Share Expand Market Share Attack leader Status quo Imitate Special- ize


Market Leader Strategies: Market Leader Strategies


Expanding the Total Market: Expanding the Total Market New Users New Uses More Usage


Protecting Market Share: Protecting Market Share Innovation Fortification Confrontation Harrassment


Expanding Market Share: Expanding Market Share Product Innovation Market Segment Innovation Distribution Innovation Promotion Innovation


Defensive Strategies: Defensive Strategies Flanking Preemptive Counteroffensive Mobile Contraction


Defense Strategies: Defense Strategies Attacker Defender (1) Position defense (6) Contraction defense


Optimal Market Share: Optimal Market Share


Market Challenger Strategies: Market Challenger Strategies


Market Challenger Strategies: Market Challenger Strategies Direct Attack Backdoor Attack Guppy Attack


Attack Strategies: Attack Strategies Frontal Attack Flank Attack Encirclement Attack Guerilla Attack Bypass Strategy


Attack Strategies: Attack Strategies


Specific Attack Strategies: Specific Attack Strategies Price-discount Cheaper goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing cost reduction Intensive advertising promotion


Market Follower Strategies: Market Follower Strategies


Market Follower Strategies: Market Follower Strategies Found Where Homogeneous Product High Capital Intensity Low Differentiation Options High Price Sensitivity Highly Competitive Industry Strategy of Conscious Parallelism


Market Follower Strategies: Market Follower Strategies Strategic Considerations Segment, Segment, Segment Use R & D Efficiently Think Small Have an Energetic CEO Who is Everywhere at Once


Market Nicher Strategies: Market Nicher Strategies


“Nichemanship”: “Nichemanship” End-user specialist Vertical-level specialist Customer-size specialist Specific-customer specialist Geographic specialist Product or product-line specialist Product-feature specialist Job-shop specialist Quality-price specialist Service specialist Channel specialist


Balance: Balance Competition Customer + Fighter orientation + Alert + Exploit weaknesses - Reactive + ID opportunities + Long-run profit + Emerging needs & groups