Challengers & Nichers
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Transcript of Challengers & Nichers
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Definition: A runner-up firm in an industry that is fighting hard to increase market share
Competitive position: Market challenger: 30%
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Mind should be different from
leader.
Speed.
Cut the flab.
Be different, stand for
SOMETHING.
Innovative power.
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“The enemy advances, we retreat.
When they camp, we harass.
When they are tired, we attack,
When they retreat, we pursue”.
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Cannot win just by imitating the
leader.
Attack the market leader
strengths rather than it’s
weaknesses.
Indirectly attacking weaknesses
or gaps in the market coverage.
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24*7
Restless
No room for complacency
Life ???
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It can attack the market leader
It can attack firms of its own sizes
It can attack small local & regional firms
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Types of Attack Strategies:Frontal attackFlank attackEncirclement attackBypass attackGuerrilla attack
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The challenger has sufficient fire-power and staying power, and
The challenger has clear distinctive advantage(s)
e.g. Japanese and Korean firms like LG and Samsung launched frontal attacks in various ASPAC countries through quality, price and low cost
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Attack the enemy at its weak points or blind spots i.e. its flanks
Ideal for challenger who does not have sufficient resources
e.g. Honeywell set up its strong sales branches in medium and small size cities which IBM had rejected.
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Attack the enemy at many fronts at the same time
Ideal for challenger having superior resources
e.g. Sun Microsystems as a rival of Microsoft licensed its java software to many company and software developer.
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By diversifying into unrelated products or markets neglected by the leader
Could overtake the leader by using new technologies
e.g. Pepsi use a bypass attack strategy against by purchasing orange juice troponica in 1998 which had almost twice the market share of coca-cola’s minute maid.
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By launching small, intermittent hit-and-run attacks to harass and destabilize the leader
Usually use to precede a stronger attack
e.g. Airlines use short promotions to attack the national carriers especially when passenger loads in certain routes are low.
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1-14
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Intensive Advertising Promotion
Productproliferation
Prestige goods Price-discount
Product Innovation
Distributioninnovation
Improvedservices
Manufacturing cost reduction
Specific Specific Attack Attack
StrategiesStrategies
Lower-pricegoods
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EXAMPLES
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EXAMPLES
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EXAMPLES
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EXAMPLES
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EXAMPLES
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EXAMPLES
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EXAMPLES
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EXAMPLES
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EXAMPLES
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A Small market consisting of a individual or small group of customers with similar characteristics or needs.
It is a process of carving out a small part of the market whose needs are not fulfilled.
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An ability to segment the market creatively, focusing activities only on areas where a company has particular strength that are especially valued.
Efficient use of R & D resources, using them where they can be most effective.
Thinking small: adopting “small is beautiful approach”. Eg: SONY
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Know your self Know your customer Know your competitors Develop a continuous information system Apply differentiation Do not compete in the same market
segment with yourself
contd…
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Create your safe heaven. Do not spread too thin. Develop a corporate marketing
strategy. Be alert be in control. Do not be static, look for new pastures
continuously.
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MARKET-NICHER SPECIALTIES:
MARKET-NICHER SPECIALTIES:
End-user Vertical-level Customer-size Specific customer Product/product
line
Geographic Product feature Job-shop Quality-price Service Channel
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A Nicher should identify how a company can balance a customer vs. competitor orientation.
Competitor-centered companies evaluate what competitors are doing, then formulate competitive reactions
Customer-centered companies focus on customer developments when formulating strategy
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A mass-marketing company can be characterized as being centrally led and bureaucratic.
Niche marketing organizations are decentralized, with several strategic business units which anticipate decision making constituting responsiveness and flexibility.
contd…
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Niche marketing, in contrast to mass marketing, yields “greater profits”. As a result, the nicher can charge a substantial markup over costs because of the added value (Coca-Cola, IBM).
Most companies start out as niche marketers and evolve into mass marketers as their product life cycles tend to develop into maturity.
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THANK YOU!