Chapter18- Marketing

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 2320A/B
Professor
Angela White
Semester
Fall

Description
Chapter Eighteen- Creating Competitive Advantage Competitive Advantage: An advantage over competitors gained by offering consumers greater value than competitors do. Competitor analysis: The process of identifying key competitors, assessing their objectives, strategies, strengths and weaknesses and reacting patterns and selecting which competitors to attack or avoid Competitive Marketing Strategies: Strategies that strongly position the company against competitors and give the company the strongest possible strategic advantage. • Competitive advantages require delivering more value and satisfaction to target consumers than competitors do • Competitive marketing strategies are how companies analyze their competitors and develop value‐based strategies for profitable customer relationships 1) Creating Competitive Advantage Competitor analysis is the process of identifying, assessing, and selecting key competitors Competitor Analysis Competitors can include: • All firms making the same product or class of products • All firms making products that supply the same service • All firms competing for the same consumer dollars Assessing Competitors Competitor Objectives -Profitability -Market Share Growth -Cash Flow -Technological Leadership -Service Leadership Competitors Strategies -Strategic group offers the strongest competition A Strategic Group is a group of firms in an industry following the same or similar strategies in a given target market Benchmarking is the process of comparing the companies products and processes to those of the competitors or leading firms in other industries to identify “best practices” and find ways to improve quality or performance Selecting Competitors to Attack and Avoid Customer value analysis determines the benefits that target customer’s value and how customers rate the relative value of various competitors offers • Identification of major attributes that customer’s value and the importance of these values • Assessment of the companies and competitors performance on the valued attributes • Strong or weak competitors • Close or distant competitors • Good or bad competitors Finding uncontested market spaces – “blue ocean strategy” • Identifies competitive information and the best sources of this information • Continually collects information • Checks information for validity and reliability • Interprets information • Organizes information • Sends key information to relevant decision makers • Responds to inquiries about competitors 2) Competitive Strategies • Entrepreneurial marketing • Formulated marketing • Intrepreneurial marketing Entrepreneurial marketing involves visualizing an opportunity and constructing and implementing flexible strategies Formulated marketing involves developing formal marketing strategies and following them closely Intrepreneurial marketing involves the attempt to reestablish an internal entrepreneurial spirit and refresh marketing strategies and approaches Basic Competitive Strategies Michael Porters four basic competitive positioning strategies Overall cost leadership strategy is when a company achieves the lowest production and distribution costs and allows it to lower its prices and gain market share Differentiation strategy is when a company concentrates on creating a highly differentiated product line and marketing program so it comes across as an industry class leader Focus strategy is when a company focuses its effort on serving few market segments well rather than going after the whole market Porter believed that a company that pursued a clear strategy would achieve superior performance and that companies without a clear strategy would not succeed Porter considered no clear strategy to be “middle of the road” Michael Treacy and Fred Wiersema suggest companies can gain leadership positions by delivering superior value to their customers in three st
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