Group 1 - Dealing With Competition - DEALINGWITH COMPETITON...

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DEALING WITH COMPETITON-- Strategies for –vMarket LeadervMarket FollowervMarket ChallengervMarket NichesGroup 1 – Marketing Management Presentations
COMPETITONBy Jojen Jose George
Definition of CompetitionCompetitionis a contest between individuals, groups, nations, animals, etc. for territory, a niche, or allocation of resources. It arises whenever two or more parties strive for a goal which cannot be shared. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms". Business is often associated with competition as most companies are in competition with at least one other firm
PORTERS 5 COMPETITIVE FORCESFramework for the industry analysis and
The  5 main forces that may be decisive in helping shape the outcomeSuppliersNew entrantsSubstitute productBuyersIndustrial competitor
Industry CompetitionRivalry among existing firmsBuyersPotential EntrantsSuppliersSubstitutesFive Forces ModelMichael E. PorterBargaining power of suppliersBargaining powerof buyersThreats of New EntrantsThreat of substitutesProducts or services
THREAT OF NEW ENTRANTSNew entrants bring increased capacity to the industry and are often backed by substantial resources.New entrants can be deterred by “barriers to entry”
The main barriers are:Economies Of ScalePatentProduct DifferentiationGovernment Policy SkillCapitalBARRIERS TO ENTRY
The bargaining power of suppliersSuppliers exert power in the industry by threatening to raise prices or reduce quality.Suppliers are likely to be powerful if:Supplier industry is dominated by a few firmsSuppliers products have few substituteBuyer is not an important customer to supplier
THE BARGAINING POWER OF THE BUYERBuyers compete with the supplying industry by:Bargaining down pricesForcing higher qualityBuyer group are likely to be powerful ifBuyers are concentratedProducts are undifferentiated
THE THREAT OF SUBSTITUTE GOODSProducts with similar function is known as Substitute Goods.Examples: Digital Camera replaces the need for film , fax machines replacing overnight delivery etc..Keys to evaluating substitute product:Products with improved performanceRelative products with better pricing
RIVALRY AMONG EXISTING COMPETITORSIntense rivalry often plays out in the following ways:Price competitionAdvertising battlesNew product roll outsIncreasing customer warranties and services
<Video-1>Good illustration of Advertising Battles. The war being waged between Pepsi and Coca Cola.

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