Competitive Strategies

Prof. Arijit Bhattacharya

Hypothetical Market Structure
 Broad Market Leader Strategies
1.Expand total market 2.Expand market
New customers share
• Non users (market
penetration) 3.Defend market
• New market segment share
• Geographical expansion
Existing customers
• More Usage (Moov)
New and existing customers
• New uses (CDM)
Six Types of Defense Strategies
 1.Position Defense
• Occupying the most desirable market space in
the minds of the consumers

• Setting up barriers to market entry around a

– product
– brand
– product line
– market segment
• Google
 2. Flanking Defense
• Market leader tries to protect a unguarded or
weakly guarded market

• Product flanking
– Multibranding strategy
Multiband Strategy
Soaps & Detergents

Premium
Dove Surf, Ariel

Mid range
Lux, Liril Sunlight,Rin, Tide

Economy
Lifebuoy, Hamam Wheel,Ghari, Fena
 3.Preemptive Defense
• Detect potential attacks and attack the enemies
first.
• Product/brand proliferation to signal not to
attack
• Vaporware
 4.Counteroffensive Defense
• Responding to competitors’ head-on attack by
identifying the attacker’s weakness and then
launch a counter attack.
 5.Mobile Defense
• The leader stretches its domain over new
territories.
– Market broadening
– Market diversification
• Netflix, Amazon
 6.Contraction Defense
• Withdraw from the most vulnerable segments
and redirect resources to those that are more
defendable.
• Planned contraction or strategic withdrawal.
• TATA group sold TOMCO (soaps and
detergents unit) to Unilever.
Market Challenger Strategies
 1.Challenger-Frontal Attack
• Challenger has to be rich both in resources and
capabilities.
• Price war
• Pepsi Challenge
 2.Challenger-Flanking Attack
• Challenger attacks the leader at his weak point
or blind spot.
• Geographical flanking
– Spot underperforming areas
• Segmented flanking
– Challenger attacks market segment/areas of
technology neglected by leaders
 3.Challenger-Encirclement Attack
• Surrounding a competitor with several brands
and forcing it to defend itself on many fronts at
the same time.
• Type
– Product encirclement
– introduces products with many different qualities,
styles, and features that overwhelm the
competition's product line.
 4.Challenger-Bypass Attack
• Bypassing the leader to attack easier markets.
Indirect attack.
– Diversifying into unrelated products
– Diversifying into new geographical markets
• Regional brands
– New technologies
• Google vs. Yahoo
• ITC (FMCG)
 5.Challenger-Guerrilla Attack
• Made up of series of small, intermittent hit-
and-run attacks by a challenger to harass and
destabilize the market defender.
• Objective
– Keep the leader busy in putting out small bush
fires so that overall strategic focus wanes
– 1996 ICC world cup: Pepsi vs. Coke
• Not a long term strategy
 Market Follower Strategies
1. Counterfeiter
– Copies leader’s product and packages and sells it on
the black market.
2. Cloner
– Copies the leader’s products as it is as well as name,
packaging with slight variations
3. Imitator
– Copies some things from leader but differentiated on
packaging, advertising, pricing or location
4. Adapter
– Takes leader’s products and adapts or improves them
 Market-Nicher Strategies
1. End-user specialist (value added
reseller)
2. Customer size specialist
3. Specific customer specialist
4. Geographic specialist
5. Product/Product line specialist
6. Job-shop specialist (parts
manufacturer)
7. Quality-Price specialist
8. Service specialist
9. Channel specialist