There are several areas of business strategy and marketing that have
been studied to illustrate what works for companies seeking to build
on market share:
1. Profit in market share (PIMS) studies, which attempt to identify
statistically what's most-successful in building competitiveness
2. Value chain analysis, which seeks to identify what customers value
3. SWOT analysis, which looks at
strengths/weaknesses/opportunity/threats for the market leader and
competitors
4. segmentation analyses
For background on each of these methods you can see:
1. This "A Short Introduction to PIMS" by Ted Mitchell, a professor at
the University of Nevada at Reno (undated):
http://bold.coba.unr.edu/769/Week5/316PIMS.pdf
2. For an introduction to value chain analysis, this brief by Bradley
Gale is a good one, "Measuring and Improving Customer Value,"
(undated):
http://www.cval.com/Gale/ISBM.RTF
3. Mindtools outlines the "SWOT Analysis" (undated):
http://www.mindtools.com/swot.html
4. Segmentation analyses can happen by characteristics of buyers;
characteristics of the product; industrial vs. retail purchasers;
geographical location; distribution channel and price – to name the
most-significant patterns.
TRADITIONAL LEADERHSIP STRATEGIES
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The traditional strategies take advantage of the leader's position and
strengths, which often are financial strengths, to extend the
company's position through:
· acquisition: as Ford, the dominant U.K. auto brand purchased Jaguar
in 1989; or Daimler-Benz purchased Chrysler for distribution in the
U.S. market.
· product segmentation: Coke introduces additional varieties of New
Coke, Classic Coke, Diet Coke, caffeine-free Diet Coke, Cherry Coke.
· customer segmentation: Wal-Mart adding Sam's Club to address volume
business purchasers
· brand extensions: taking the product's brand name into new
technology categories, as Compaq has done by private-labeling monitors
and printers
· customer loyalty programs: they are as old as S&H Green stamps, but
American Airlines was able to marry technology with direct marketing
with dramatic effect in the first airline mileage program, AAdvantage
· promotion: these programs don't have to be as dramatic as customer
loyalty programs but targeted couponing or other promotional programs
can put continual pressure on competitors
· store-level detailing: stocking and managing the inventory of
retailers, done by Frito-Lay and soft drink manufacturers in the U.S.
at supermarkets on a daily basis
· price segmentation: practiced by every auto company. Toyota moves
its price segment up by offering the Lexus; GM moves into lower price
categories with a Chevette
· technology segmentation: Hewlett-Packard offers consumers both ink
jet and laser printing technologies, taking advantage of common
distribution and overlapping customer bases
· advertising: designed to build awareness and ultimately purchasing
· financial strength: financial strength can be used in many ways,
including buying competitors. However, it's often used to promote the
purchase of capital goods – essentially turning the supplier into a
bank. You see it practiced today with low-interest loans for autos
but it's practiced in aircraft, heavy equipment, farm equipment and
other industries.
· purchasing distributors: as industries consolidate, key distributors
are often purchased to ensure control and forestall competitors.
Forty years ago consumer electronics were sold through distributors;
now most sales to retailers go through company-owned distribution
points.
NON-TRADITIONAL
---------------------------
Beyond using the four P's of marketing (product, price, promotion,
position) there are some no-traditional ways that you may wish to use
to contrast with those methods above. Introduction of computer
technology has shortened the pipeline to customers.
The introduction of technology altered the competitive landscape for
both Wal-Mart and Procter & Gamble. In 1987 the-late Sam Walton told
P&G, "The way we do things is way too complicated. You should
automatically send me Pampers, and I should send you a check once a
month. We ought to get rid of all this negotiation and invoicing."
The automated system developed computerized process that:
* gave P&G access to Wal-Mart inventory for the first time
* gave the supplier access to retail point-of-sale information
* enable P&G to provide just-in-time delivery to stores – and
eliminate the cost of warehousing.
You can find the article from CIO Magazine, "It All Began with Drayer"
(Aug. 1, 2002) at:
http://www.cio.com/archive/080102/drayer.html
Google search strategy:
PIMS + "market leadership"
"value chain analysis"
"segmentation analysis" + "brand management"
Best regards,
Omnivorous-GA |
