The Strategies to achieve competitive positions

The Strategies to achieve competitive shoessChoose one of the four competitive positions mentioned in the strategy lecture and discuss, victimization theoretical accounts, the grocerying strategies an organisation would employ to achieve that position.Competitive strategies ar chosen by firms depending on their roles in the mart leader, challenger, follower or nicher. This essay allow focus on firms who be market leaders and what marketing strategies atomic number 18 used to help them achieve that position.Every industry has its own market leader. Kotler, P. (2005) believes the market leader is one that has the largest market serving or highest profitability margin in a given market for goods and services. Market leader often leads another(prenominal) firms in product innovation, toll changes distribution channels and promotion strategies. Good examples of market leaders would be Apple with their ranges of IPod, jibe phones and tablet computer, Google with its search engi ne, loving net operative Facebook and Tesco (supermarket chains).Market leaders is extremely important. Al about every firm wants to be the first in the market. The reason is not only the revenue but it is because most nodes prefer to buy from leaders. They perceive leaders to be better and they perceive leaders to be a safer purchase. Reference groups are great in influencing consumers behaviour. lot tend to buy from where everyone else buys, this helps military unitening the leaders position.To perish a market leader, a firm needs to own and control the relevant technology in whatever market it is in either through the use of patent or other proprietary protections. Moreover, it needs to adopt and implement better technologies directly, whenever they become available, regardless of whether or not any other organisations are currently using them. It is critical to be the first to use a technology or create a category for a product. Then actualise it an industry standard.Bain es, P., Fill, C. Page, K. (2008) defined the two main strategies used by firms to achieve market leadership position areAttack the marketDefend the positionApart from expanding the derive demand and protecting market share, the market leaders should try to expanding market share, even if market size remains constant (Kotler Gary, 2005). Forth strategy is proposed by Brassington, F Pettitt, S. (2006) who believed that companies should also seek stability and retention of customer base.In this essay, the four strategies will be analysed with appropriate examples of firms that applied those strategies successfully and firms that failed during competition.Attack the marketAttack the market stinker be operated in different ways. The firms shadow create untested uses, new consumers categories or increase frequency of use.This strategy is extremely popular as the dominant firm normally gains the most when the total market expands. In general, the market leader should look for new c ustomers or more usage from existing customers.Every product has the electric potential of attracting buyers who are unwitting of the product or who are still under consideration because of price or the products do not have some certain features. A company can search for new users among three groups those who might use it but do not (market-penetration strategy), those who have never used it (new-market segment strategy), or those who lively elsewhere (geographical-expansion strategy).Example Johnson Johnson baby shampoo was losing market share due to birth rate declining, they had expand their customers segmentation, targeting adults which helped them regain their leader position. (New user)Kelloggs Crunchy Nut has expanded their ranges and introduced morsel bars which increase frequency of use, relatively increase sales of the product.Defend the position/Protect market shareThe leader must constantly oversee the market because the market challenger is persistently trying to reward away market share or worse, to replace the leaders position in the market. The firms can take hold their positions in the market and their market share by monitoring their position, regular innovation eliminate any weaknesses, price cutting and discount, increases promotion.Defend the position in the market is a difficult task for market leaders since they may be under attack from numbers of different competitors small to spiritualist firms in the existing market or big players want to expand from a completely different industry. Although defence strategies may require a deployment of resources to defend different parts of the operation, it is hard of a challenger brand to dislodge a market leader if the market leader is actively defending territory. on that point are six different ways in defense strategy which arePosition defense (purely defensive is not enough, firms must take discourtesy counter-measure). It is considered as the least successful in the defense strate gies. This defense was use by Mercedes until Toyota launched a frontal attack with its Lexus.Mobile defense (more than aggressively defend, stretches compass over new territories)E.g. Legend Holdings, the top China PC maker Legend has announced a joint venture with AOL to broaden its business to hand over Internet services in the mainland.Flanking defense (guarding territory is not enough, firms must create outposts/flanks to protect weak front and invasion base for counter attack)E.g. metal(prenominal) Eagle is a flanking brand introduced by San Miguel in the Philippines as a defense against APBs Beerhausen.Contraction defense (strategic withdrawal give up weak territories, concentrates strength and resources at more dependable areas).The market leader must make its own assessment to prioritise the importance of territories and should be willing to relinquish those that are not important to defend for those that are.E.g. Indias TATA Group sold its soaps and detergents business u nits to Unilever in 1993 or Ford retired T-birds and Probe to focus on Contour and Taurus.Pre-emptive defense (Detect potential attacks and attack the enemies first)Seiko with 2,300 watch models is considered as a successful example for this category while Heinz proved failure as they did not respond to Hunts attack which guide to Hunt established a rival brand.Counter-offensive defense (Respond to competitors head-on attack by identifying the attackers weakness and then launch a counter attack)E.g. Toyota launched the Lexus to respond to Mercedes attack. sustained innovation is considered as the best way to protect market share and is required for long-term leadership. When leaders become self-satisfied with their products or services, it becomes easier for the challenger to make progress. In large markets, small increases in market share can turn into great sales increases a one-point gain in market share can be worth hundreds of millions of pounds. as yet not every firm underst ands the importance of continuous innovative process and often failed in retaining their positions in the market.Companies are hindered from investing and following through with innovation because they fear cannibalising established products (Tellis Golder, 1996). In modulate to protect mainframe sales, IBM obstructed its development of minicomputers and workstations while competitors kept reservation inroads into the mainframe market.Another reason why companies are less worried about innovation is that they are satisfied with their progress. yokel was satisfied with its social networking Yahoo 3601until the company started to lose market share to Facebook and Friendster in Asia.Thirdly, large bureaucracies can discourage innovations or slow the progress when companies bring new products to market. GM and IBM are well-known examples for this problem. Despite their technological strength and financial resources, both companies were slow to bring out new products because of their bureaucratic approval process.Firms that do well in continuous innovation are Apple, Procter Gamble.Apple was certainly not the first manufacturer to MP3 players but its iPod was totally different to anything else on the market at the while of its release. Apple has a large range of IPod from IPod shuffle, IPod Nano with stylish shapes or IPod classic for music lovers as they can hold a great number of files and IPod touch for multifunctional uses. The firm also introduced to its customers a range of IPhone from 2G-3GS and promising the new version of IPhone (IPhone 5) in 2011.Procter Gamble the worlds largest consumer products company- takes innovation seriously which shown in their heavily investment in innovative process. They outspend competition in Research and Development believing if they provide branded products of superior quality and value that improve the lives of the worlds consumers, consumers will reward them with leadership sales, profit and value creations.They are well-known for their open innovation outlook. As not all brilliant ideas are coming from internal, it is critically for firms to seek new ideas, innovations from outside. PG has introduced three different networks in which they encouraged their employees to interact with outside world or link different companies in different part of the world working towards a same goal. By doing this, they have received exceptional amount of new ideas, innovative products to increase sales and market share in consumers market. broaden market shareExpand market share can gain great profits for the company but there is a drawback. Too many customers can put a strain on the firms resources, hurting product value and service delivery.Example America Online experienced go uping pains when its customer base expanded, resulting in system outages and access problems (Kotler Keller, 2006).Consumers may also infer that bigger is not better and assume that growth will lead to a deterioration of quality. If exclusivity is a key brand benefit, existing customer may resent additional new customers. (Kotler Keller, 2006)This strategy can be operated via the marketing mix. However this strategy can provoke antitrust action or anti-dumping charge. Vietnamese rice export market has received multiple charges on dumping issues in European market trying to gain more market share in short period of time. Economic cost such as healthy costs needs to be taking in consideration. Wrong marketing mix strategy is also one of the problems firms face when expanding market share (for example focus on unattractive segments).Successful example of firm in expanding market share is Starbucks. The company plans to continue to rapidly expand its retail operations, grow its specialty sales and other operations, and selectively pursue opportunities to leverage the Starbucks brand through the introduction of new products and the development of new distribution channels.Seek stability and retention of custom er baseTesco is a great example for applying this strategy. They try to retain customers loyal via promotion and Club card which customers can save as they shop and spend the points on various products. Tesco seeks stability, it competes on prices with rivals such as Sainsburys and Asda, although it also focuses on customer service, how to deliver good service with reasonable price to the customers.It is important that leader firms understand their strengths and weaknesses, also have a clear view of their competitors in the market. Choosing the right defense strategy is critical in order to retain their position as leaders and continue to expand the total market and market share, as well as profitability. Market leaders should take innovation seriously in order to stay in the leading position.