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Defining The Competitive Set

This document discusses different levels and perspectives of defining competition. It explains that competition exists on a continuum rather than a binary yes/no and should balance identifying too many versus too few competitors. It then provides examples of different types of competition including by product form, product category, budget, and more broad definitions. Finally, it discusses blue ocean versus red ocean strategic approaches to competition and creating new market spaces versus competing directly.

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84 views18 pages

Defining The Competitive Set

This document discusses different levels and perspectives of defining competition. It explains that competition exists on a continuum rather than a binary yes/no and should balance identifying too many versus too few competitors. It then provides examples of different types of competition including by product form, product category, budget, and more broad definitions. Finally, it discusses blue ocean versus red ocean strategic approaches to competition and creating new market spaces versus competing directly.

Uploaded by

saty16
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Defining the competitive set

Competition is a necessary evil


How much competition ??????

The key to competition is not whether two


products compete , but the extent to which they
compete.

The degree of competition is a continuum, not a


discrete yes or no.

Defining competition therefore requires a


balance between identifying too many
competitors (and therefore complicating instead
of simplifying decision making) and identifying
too few (and thus overlooking a key competitor
Hypothetical Market Structure

10% 20% 30% 40%


Market Market Market Market
Nichers Follower Challenger Leader
Optimal Market Share
General Attack Strategies

Frontal Attack Flank Attack

Encirclement
Bypass Attack
Attack

Guerrilla Warfare
Industry Concept of Competition
• Number of sellers and degree of
differentiation
• Entry, mobility, and exit barriers
• Cost structure
• Degree of vertical integration
• Degree of globalization
Porter’s 5 force Model OF Industry
Competition
Levels of Market Competition Budget Competition

Generic
Tea competition

Coffee
Regular Colas
Ice
Wine Cream
Diet Pepsi Lemon
Ice Cream Diet Colas
Coke Diet Rite Juices
Vanilla Cola
Coke
Pepsi Blue
Bottled Tea
Water Movies

Beer
Product
Product Form Category
Competition Fast Food competition
Product Form Competition:

The narrowest perspective of competition


Products pursue the same market
segment,having similar features.
Competition comes from only those products that
look the “same” as the product in the question.
Offers a short run approach to understanding
competition.
Product Category Competition

Based on products/services with similar features.


Sets of all TV’s, PC’S
Traditional way to determine competition.
Also known as the industry form of competition.
Form Competition

Focuses on substitutable products .

Those products and services that fulfill the


same customer – need.

It is the customer who decides what


alternative products and services solve the
same problem at hand.
Budget Competition

It is the broadest sense of understanding


competition.

It considers all products and services competing


for the fixed customers disposable income.

Difficult to implement as it implies to enormous


number of competitor.
Competitive Level Task

Product form Convince that brand is better than


others in the product form

Product Category Convince that product form is best


in the category

Generic / Form Convince that product category is


the best way to satisfy needs

Budget Convince that the generic benefits


are the most appropriate way to
spend discretionary income
Strengths and Weaknesses

Share of market

Share of mind

Share of heart
Fake brands in Rural Markets
• Look-alike
• Spell-alike
• Duplicates
Strategic approach to competition

Blue ocean vs.


Create uncontested market.
Make competition irrelevant
Create and capture new market spaces

Red ocean strategy

Compete on existing market.


Beat the demand
Exploit consumer demand
Principles of Blue ocean
There is perpetually no high performing
company.
Companies can be brilliant and wrongheaded
sometimes.
Value innovation is the cornerstone of this
strategy.

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