Strategies based on market Dominance
Typically there are four types of market dominance strategies:
- leader
- challenger
- follower
- nicher
Innovation Strategies-
This deals with the firm rate of new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:
- pioneers
- close followers
- late followers
Horizontal Integration
- vertical integration
- diversification (or conglomeration)
- intensification
Aggressiveness Strategies
This asks whether a firm should grow or not, and if so, how fast. One scheme divides strategies into:
- building
- holding
- harvesting
MARKET DOMINANCE STRATEGIES
Typically there are four types of market dominance strategies that a marketer will consider: There are
• Market leader,
• Market challenger,
• Market follower,
• Market nicher.
1 Market Leader
- It typically is the industry leader in developing innovative new business models and new products
(although not always).
- Of the four dominance strategies, it has the most flexibility in crafting strategy.
The main options available to market leaders are:
- Expand the total market by finding
new users of the product o new uses of the product o more usage on each use occasion
- Protect your existing market share by:
o developing new product ideas o improve customer service o improve distribution effectiveness
o reduce costs
- Expand your market share:
by targeting one or more competitor o without being noticed by government regulators
2 Market Challenger
- A market challenger is a firm in a strong, but not dominant position that is following an aggressive strategy of trying to gain market share.
- It typically targets the industry leader (for example, Pepsi targets Coke), but it could also target smaller,more vulnerable competitors.
The fundamental principles involved are:
- Assess the strength of the target competitor. Consider the amount of support that the target mightmuster from allies.
- Choose only one target at a time.
- Find a weakness in the target?? Position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot.
- Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders,an attacker has the advantage of being able to concentrate their forces at one place.
- Launch the attack quickly, and then consolidate.Some of the options open to a market challenger are:
- price discounts or price cutting
- line extensions
- introduce new products
- reduce product quality
- increase product quality
- improve service
- change distribution
- cost reductions
- intensify promotional activity
3 Market Follower
A market follower is a firm in a strong, but not dominant position that is content to stay at that position.The advantages of this strategy are:
- No expensive R&D failures
- No risk of bad business model
- Best practices? are already established
- Able to capitalize on the promotional activities of the market leader
- Minimal risk of competitive attacks
- Don’t waste money in a head-on battle with the market leader
4 Market Nicher
- In this niche strategy the firm concentrates on a select few target markets. It is also called a focus strategy.
- It is hoped that by focusing ones marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets,
The most successful nichers tend to have the following characteristics:
- They tend to be in high value added industries and are able to obtain high margins.
- They tend to be highly focused on a specific market segment.
- They tend to market high end products or services, and are able to use a premium pricing strategy.
- They tend to keep their operating expenses down by spending less on R&D, advertising, and personal selling.
well written