Textbook Notes (381,164)
CA (168,381)
UTSC (19,323)
MGM (268)
MGMA01H3 (184)
Chapter 18

Chapter 18-Competitive Advantage

8 Pages
119 Views

Department
Management (MGM)
Course Code
MGMA01H3
Professor
Alison Jing Xu

This preview shows pages 1-3. Sign up to view the full 8 pages of the document.
Chapter 18- CREATING COMPETITIVE ADVANTAGE
To win in todays market not only do firms have to manage products they have to
manage customer relationships as well
Competitive Advantage An advantage over competitors gained by offering
consumers greater value than competitors do
oThis translates to customer advantages from the consumers point of view
Competitor Analysis The 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
oIdentifying Competitors
Competitors can be identified as other organizations that are directly
competing in the sense that they are targeting the same class or
organizations that are providing essentially the same service (Ritz-
Carlton vs. Bed and Breakfast)
Companies have to avoid competitor myopia
Two points of view for identifying the competitors is either from the
industry point of view firms in the same industry or the market
point of view companies that are trying to satisfy the same need or
build relationships with the same customer group
oAssessing Competitors
Determining Competitors’ Objectives
Knowing a competitors mix of objectives reveals whether the
competitor is satisfied with its current situation and how it
might react to different competitive actions
A company must also monitor the objectives for various
segments: if they discover a new segment then the company has
an opportunity
Identifying Competitors’ Strategies
www.notesolution.com
STRATEGIC GROUP A group of firms in an industry
following the same or a similar strategy in a given target
market
If a company enters one of the strategic groups, the other
members of the group become key competitors
There is also rivalry amongst different groups as they can have
overlapping customer segments
A company would benefit from understanding how competing
firms strategize their delivery of value to customers
Assessing Competitors’ Strengths and Weaknesses
First step is to collect data on the competing firm of their goals,
strategies, and performance over the past few years
Normally this information is collected through secondary data
BENCHMARK The process of comparing the company’s
products and processes to those of competitors or leading firms
in other industries to identify best practices and find ways to
improve quality and performance
Estimating Competitors’ Reactions
A company’s objectives, strategies, strengths and weaknesses
tell how they will react to price-cuts from competitors
Some firms reaction much more fiercely than others (i.e. P&G)
Knowing how major competitors react gives the company clues
on how best to attack competitors or how best to defend the
company’s current position
oSelecting Competitors to Attack and Avoid
Strong or Weak Competitors
Most companies prefer to compete against weak competitors
oRequires fewer resources and less time
oBut in the process of targeting weak competitors the
firm may gain very little
Competing against strong competitors can sharpen the firms
abilities
www.notesolution.com
oHigher risk, higher returns
Useful tool for assessing competitor strengths and weaknesses
is CUSTOMER VALUE ANALYSIS Analysis conducted to
determine what benefits target customers value and how they
rate the relative value of various competitors’ offerings
The key to gaining competitive is to take each customer
segment and examine how the company’s offer compares to that
of iuts major competitors
If the company’s offering delivers greater value by exceeding
the competitors offering on important attributes, the company
can charge a higher price and earn higher profits, or it can
charge the same price and gain more market share
Close of Distant Competitors
Close competitors those that resemble them most
Distant Competitors Opposite of above
i.e. Nike is close to Adidas but not close to Timberlands
This can backfire where beating out close rivals can bring upon
tough competitors (i.e. Bausch and Lomb)
Good or Bad Competitors
A company needs and benefits from competitors
Competitors may overall increase the demand for the product
and be beneficial to each other
Good competitors play by the rules of the industry
Bad competitors break the rules
Finding Uncontested Market Spaces
Called a blue ocean strategy
Creating something new where the product differentiates itself
where new market space is discovered
i.e. Cirque du Soleil
oDesigning a Competitive Intelligence System
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
Chapter 18- CREATING COMPETITIVE ADVANTAGE To win in todays market not only do firms have to manage products they have to manage customer relationships as well Competitive Advantage An advantage over competitors gained by offering consumers greater value than competitors do o This translates to customer advantages from the consumers point of view Competitor Analysis The 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 o Identifying Competitors Competitors can be identified as other organizations that are directly competing in the sense that they are targeting the same class or organizations that are providing essentially the same service (Ritz- Carlton vs. Bed and Breakfast) Companies have to avoid competitor myopia Two points of view for identifying the competitors is either from the industry point of view firms in the same industry or the market point of view companies that are trying to satisfy the same need or build relationships with the same customer group o Assessing Competitors Determining Competitors Objectives Knowing a competitors mix of objectives reveals whether the competitor is satisfied with its current situation and how it might react to different competitive actions A company must also monitor the objectives for various segments: if they discover a new segment then the company has an opportunity Identifying Competitors Strategies www.notesolution.com
More Less
Unlock Document


Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit