Analyze different types of competitive strategies and identi

Analyze different types of competitive strategies and identify real examples on a market leader, market-challenger, market-follower and market-nicher. Explain your choices.

Solution

Competitive strategies on the basis of market share, brand image, market position, resources and capacities are classified into 4 types:

1. Market Leader: The market leader enjoys the highest market share in the industry of business function. The competitors benchmarks the leader and try to compete them to increase their market share. In relation, the leader also works to maintain the highest position in the industry. Herein market leaders works on:

Examples; Maruti - Suzuki enjoys the highest share in 4 wheeler segment and it is able to maintain the same. Similarly Coca-Cola defends itself from Pepsi to maintain its share.

2. Market Challenger: Commonly known as runners up enjoys second and third position in the market. Their strategies are classified further as:

Examples; The fight of increasing market share between IBM and Microsoft is the best example.

3. Market Follower: Companies, which follow the leaders of the industry rather than competing are the followers. Usually they copy most of the strategies followed by leaders and try to sell same product at slightly lower prices. Followers must keep manufacturing cost lower and should try to provide better services in lower prices to enjoy the position in the market. They do have a fair share to sustain in the market. The strategies that are followed by Followers are:

Counterfeiter (duplication in original products)

Cloner (Making almost same look a like products)

Imitator (copy aspects of leader by changes in positioning)

Adaptor (taking a leaders product and improving them)

Examples; Auto component are easily copied and can be sold in unorganized market, Cements, steel, etc are types of product wherein brand name hardly makes any difference. Some duplicate soft drinks are being sold with similar names of Coca-Cola

4. Market Nicher: This position enjoys the smaller market share wherein they have limited number of buyers. This is a very small market with distinctive needs and even customers are ready to pay high prices. They are basically:

Example, hotels or sports manufacturing company. Pens like Pierre Cardin