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DEALING WITH COMPETITION

Rye GutierrezAteneo Graduate School of Business

Top 10 Concepts

Outline: Dealing with your market’s competition…

1. Identifying competitive forces are comprised of threat of: intense segment rivalry, threat of new entrants, threat of substitute products, threat of buyers’ growing bargaining power, threat of suppliers’ growing bargaining power.

2. Identifying competitors must be based from both an industry and market point of view

3. Competitor analysis is done by understanding their strengths and weaknesses.

4. Another guage of competitor analysis is: share of market, share of mind, and share of heart.

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Outline: Dealing with your market’s competition…

5. In any market, there are four distinct characters: the leader, challenger, follower and nicher.

6. The leader is the undisputed principal company in the market that commands majority of the market share. Unless the leader has a legal monopoly, it must always be on its toes.

7. The challenger believes the leader is not invincible.

8. The follower doesn’t like to rock the boat.

9. The nicher finds his own way.

10. Balancing between customer and competitor is the smart way to go for companies

Concept 1: Identifying competitive forces

Comprised of :1. Threat of Intense

segment rivalry,

2. Threat of new entrants,

3. Threat of substitute products,

4. Threat of buyers’ growing bargaining power,

5. Threat of suppliers’ growing bargaining power.

Concept 2:Identifying competitors

Must be based from both an industry and market point of view

Industry

Market

Concept 3: Competitor Analysis

is done by understanding

their strengths

and weaknesses.

Concept 4: Another guage of competitor analysis

1. Share of Market, competitor’s share of target

market

2. Share of Mind, company name recall

3. Share of Heart.

customer preference

Concept 5: Company order in the Industry Totem Pole

In any market, there are four distinct characters: the leader, the challenger, the follower and

the nicher.

Concept 6: The Leader

Is dominant Looks for ways

to get ahead of the pack

At all times tries to increase its lead.

Concept 7: The Challenger

Attacks the leader because of large market share

Can also attack contemporaries and/or lower companies to gain their market share

Concept 8: The Follower

Doesn’t want to rock the boat.

Content with Market Share

Is there “for the ride.”

Concept 9: The Nicher

Serves small market segments not attacked by larger firms

Can command premium price due to specialized skills.

Concept 10: Balance

Balancing between customer and competitor is the smart way to go for companies