c Good or Bad Competitors Every industry contains good and bad competitors A

C good or bad competitors every industry contains

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c) “Good” or “Bad” Competitors: Every industry contains “good” and “bad” competitors. A company should support its good competitors and attack its bad competitors. Good competitors: play by the industry’s rules make realistic assumptions about the industry’s growth potential set prices reasonable in relation to costs; they favor a healthy industry; limit themselves to a portion or segment of the industry motivate others to lower costs or improve differentiation; and Accept the general level of their share and profits. Bad competitors try to: buy share rather than earn it take large risks; they invest in overcapacity; and upset industry equilibrium 3.2.2. Competitive Strategies A company must design a broad competitive strategy by which to gain competitive advantage. However, no one strategy is best for all companies. According to Michael Porter (1980) the basic or generic competitive strategies include the following. Activity 3 What is the purpose of identifying competitors' objectives, strategies, strengths, weaknesses, strong, and weak competitors? Activity 3 What is the purpose of identifying competitors' objectives, strategies, strengths, weaknesses, strong, and weak competitors? Commentary Current profitability, market share growth, cash flow, technological leadership, service leadership Commentary Current profitability, market share growth, cash flow, technological leadership, service leadership
MARKETING THEORIES AND PRACTICES 1. Cost -leadership - Cost leadership is gained by being the lowest-cost producer in the industry. This provides the company flexibility in responding to competitive moves by always being able to offer the lowest price to the consumer. 2. Differentiation - This strategy creates competitive advantage by offering products with unique customer benefits or features not available from competitive offerings. Here the company concentrates on creating a highly differentiated product line and marketing program so that it comes across as the leader in the industry. This image helps it to compete against lower cost rivals. 3. Focus - This strategy achieves competitive advantage by concentrating on a narrow segment of a larger market. Emphasis is often on quality or benefit in a tightly defined market sub-segments. Firms competing in a given target market, at any point in time, differ in their objectives and resources. These firms might take four different forms. 1. Market leader - the firms with the largest market share. 2. Market challenger - the runner-up firm which fights to overtake the leader. 3. Market follower - the firm that also has a runner-up status but seeks to maintain share and not challenge the leader. 4. Market nicher - the firm that serves small segments that the other firms overlook or ignore.

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