It is suggested that a company’s competitive position in an industry is one of the most important determinants of marketing strategies. A significant contribution to thinking in this area has stemmed from the work of the Arthur D. Little Consultancy Company. They suggest the following alternative categories of competitive position for a company in an industry. Associated with each category of alternative competitive position we have given a brief indication of some of possible implications for strategic marketing:
Dominant: As the term suggests, the dominant competitor in an industry is the company which overtly or tacitly controls all competitors.
Dominance may stem from a number of factors such as size/resources, control of raw materials, control of distribution channels and control of technologies. Needless to say, the dominant company is in a strong position as it can exercise considerable choice over pricing strategies.
Strong: These companies do not dominate the market, but their size and strength enables them to exercise considerable discretion over their marketing strategies. Although other competitors cannot be ignored, strong competitors are understandably treated with caution by other companies. Favourable: These competitors in a market have particular strengths which enable them to compete effectively even though they may not be amongst the largest and strongest companies. Often their favourable position derives from a particular aspect of their marketing such as a strong brand name or a reputation for technological innovation. Often such strengths may be used to lever a stronger position within a market. Companies in this position can in the long run, become strong or even dominant in a market.
Tenable: Although these competitors can make profits and survive, they are often at the mercy of dominant, strong and favourable competitors. Companies in this position have no particular significant differential advantages over their competitors and must follow the market leaders in much of their elements of marketing strategy including pricing.
Weak: These competitors are at a considerable disadvantage in the market. Their weakness may stem from factors such as small size, weak brands or poor quality. Weak competitors must improve in those areas where their weaknesses are significant or they will be driven out of the market. Non-viable: As the term implies these competitors should not be in the market as they are in no position to compete, nor do they have any avenues left that will enable them to improve their position, so they should leave the industry before they are forced out.
An alternative perspective on competitor position and marketing strategies is proposed by Kotler and Keller10 who distinguish between the strategies available to the following types of competitor in an industry:
An interesting development in the formulation of marketing and pricing strategies has taken these notions of competitive market positions, and the importance of building strategies around these and relative competitor strengths, and linked them to some of the concepts and techniques developed by military strategists when considering techniques of warfare. In part, this in itself is recognition of extreme competition in many markets, and the notion that companies must either ‘kill’ or ‘be killed’ by competitors. This notion of marketing as ‘war’ involves using the concepts of military strategists and thinkers such as Carl von Clausewitz11 and Basil Liddell-Hart12 and applying these to marketing plans and strategies As Kolar and Toporisic13 show, the concept of marketing as warfare and the application of principles of battlefield command have now become popular amongst marketing academics and practitioners.
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Marketing Management Tutorial
Development Of A Strategic Approach To Marketing: Its Culture; Internal Macro- And External Micro-environmental Issues
Markets And Customers: Consumer And Organizational Buyer Behaviour And Marketing Strategy
Markets And Customers: Market Boundaries; Target Marketing
Product And Innovation Strategies
Channels Of Distribution And Logistics
Customer Care And Relationship Marketing
Marketing Information Systems And Research
Analysing The Environment: (opportunities And Threats) And Appraising Resources (strengths And Weaknesses)
Evaluating And Controlling Strategic Marketing
Strategic Marketing Planning Tools
Services Marketing And Not-for-profit Marketing
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