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MGMA01H3 (184)
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Chapter 18

Chapter 18

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Management (MGM)

Chapter 18: Competitive Advantage • Competitive advantage: advantage over competitors gained by offering consumers greater value than competitors do • Competitor analysis: process of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses and reaction 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. Competitor Analysis: Identifying competitors  assessing competitors’ SWOT  selecting which competitor to attack/avoid • Assessing competitors: o Determining competitor’s objectives/priorities  such as market share, cost leadership, cash flow etc  It reveals whether competitor is satisfied with current situation and how it will respond to certain changes o Identifying strategies  Strategic group: group of firms in an industry following the same or a similar strategy in a given target market o Assessing strengths and weaknesses  Benchmarking: process of comparing the company’s products and process to those of competitors of leading firms in other industries to identify “best practices” and find ways to improve quality and performance o Estimating competitor’s reactions o Strong or weak competitors  Customer value analysis: analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors’ offerings  Strategic sweet spot: the spot where it meets customer’s needs in a way that rivals can’t o Close and distant competitors  Nike vs. adidas o Good or bad competitors  Company can benefit from competitors  ie. Starbucks helping smaller coffee shops get more customers o Finding uncontested market spaces  Seek out unoccupied positions in uncontested market spaces Competitive Strategies: • Entrepreneurial marketing o New companies o Companies started by entrepreneurs o Approach where resources are not devoted to advertising • Formulated marketing o Develop formal marketing strategies (usually for small businesses that are rising) • Intrapreneurial marketing o For large and mature companies that depend on formulated marketing o Encourage initiative o Re-establish commitment, creativity and passion in the company o Try new approaches • Overall cost leadership: o Achieve the lowest production and distribution costs o Price lower than competitors and win large market share o Walmart or dell • Differentiation: o Concentrating on creating a highly differentiated product line and marketing program • Focus: o Focus on serving a few market segments well Value Disciplines (strategies continued)- delivering superior value to customers • Operational excellence: o Provide superior value by leading its industry in price and convenience o Reliable, good-quality
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