COMPETITIVE

STRATEGIES FOR MARKET

LEADERS
By
Faisal Iqbal
16L-4937
BS-A
 OVERVIEW

Strategies for Market Leaders

Defense Strategy
Market-Challenger Strategies
Market-Follower Strategies
Market-Nicher Strategies
 STRATEGIES FOR MARKET LEADERS

The objectives of market leaders are:

Expand the total market by:
Finding new users
Creating new users
Encouraging more usage
Protect its current market share by:
Adopting defensive strategies
Increase its market share:
Note the relationship between market share and profitability
 DEFENSE STRATEGY

A market leader adopts defensive strategy to protect his market shares

Six commonly used defensive strategies:
1. Position defense
2. Flanking defense
3. Pre-emptive defense
4. Counter-offensive defense
5. Mobile defense
6. Contraction defense
 DEFENSE STRATEGY (CONT.)

1. Position Defense:
Defend your position/shares through:
Advertisement
New product varieties
Innovative designs
E.g. Coca-Cola Company

2. Flank Defense:
Secondary markets (flanks) are the weaker areas and prone to be covered
Avoid competitive entry in segments not covered
E.g. Colgate Toothpaste
 DEFENSE STRATEGY (CONT.)

3. Pre-emptive Defense:
Attack the enemy first
Product or brand expansion is a form of pre-emptive defense

4. Counter-offensive Defense:
Head on counter attack
Match/exceed what attacker is offering to consumers
Pricing/Discount
New products
New offers
 DEFENSE STRATEGY (CONT.)

5. Mobile Defense:
Diversify/enter broader market
Redefine the business
Focus efforts on the competition

6. Contraction Defense:
Leave business where you can not compete
By planned contraction or strategic withdrawal
E.g. Nokia Company
 MARKET-CHALLENGER STRATEGIES

The market challenger strategic objective is to gain market share and to become the
leader eventually.
Five types of attack strategies:
1. Frontal Attack
2. Flank Attack
3. Encirclement Attack
4. Bypass attack
5. Guerrilla Attack
 ATTACK STRATEGIES

1. Frontal Attack
Head-on Attack
Attacker matches its opponents:
Product
Advertising
Price
Distribution

2. Flank Attack
Attack the enemy at its weak points/flanks
Ideal for challenger who does not have sufficient resources
 ATTACK STRATEGIES (CONT.)

3. Encirclement Attack
Attack the enemy at many fronts at the same time
Ideal for challenger having superior resources
4. Bypass Attack
By expanding into unrelated products or markets neglected by the enemy
Overtake the enemy by using new technologies
5. Guerrilla Attack
Launching small, irregular hit-and-run attacks to destabilize the opponent
Used to precede a stronger attack
 MARKET-FOLLOWER STRATEGIES

Many companies prefer to follow rather than challenge the market leader

Three broad follower strategies:

1. Cloner
2. Imitator
3. Adapter
 MARKET-FOLLOWER STRATEGIES (CONT.)

1. Cloner
The cloner emulates the leaders products, name, and packaging with slight variations.
If you get watches made from Rado, or bags of Gucci, with Rado spelled as RADA and Gucci spelled as GUCCA, than
thats cloning.

2. Imitator
The imitator copies some things from the leader but differentiates on packaging, advertising, pricing, or location
Tata sky brought digital TV revolution to India but was soon imitated by Videocon, Airtel, Reliance and others.

1. Adapter
The adapter takes the leaders products and adapts or improves them
Cars like Maruti 800, Alto, Zen, brio, etc. are all adapters
 MARKET-NICHER STRATEGIES

Smaller firms can avoid larger firms by targeting small markets or niches that are of
little or no interest to the larger firms.
Avoid direct competition with larger competitors
Nichers must create, expand and protect niches.
E.g. Nike constantly created new niches-
Cycling, walking, hiking, cheerleading etc.

It enables you to effectively target marketing while expanding business cost

effectively