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Your competitors aren’t perfect. Maybe their product underdelivers. Maybe their site is frustrating. Or maybe they just stopped paying attention to what their customers actually want. You don’t need to undercut prices or run aggressive campaigns. You just need to create a better, more helpful experience from the first click to the follow-up after purchase. Here’s how……Continue reading….
By Neil Patel
Source: Entrepreneur
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Critics:
The generic competitive strategy outlines the fundamental basis for obtaining a sustainable competitive advantage within a category. Firms can normally trace their competitive position to one of three factors:
- Superior skills (e.g. coordination of individual specialists, created through the interplay of investment in training and professional development, work and learning)
- Superior resources (e.g. patents, trade-mark protection, specialized physical assets and relationships with suppliers and distribution infrastructure.)
- Superior position (the products or services offered, the market segments served, and the extent to which the product-market can be isolated from direct competition.)
It is essential that the internal analysis provide a frank and open evaluation of the firm’s superiority in terms of skills, resources or market position since this will provide the basis for competing over the forthcoming planning period. For this reason, some companies engage external consultants, often advertising or marketing agencies, to provide an independent assessment of the firm’s capabilities and resources.
There is one strategy that is at times weaved into marketing strategies, however not explicitly stated. And it is unethical in that it specifically targets unsuspecting minority groups. First, consider the definition of ethics, which is the moral question of whether or not something is socially acceptable. Applying this definition to marketing strategy, companies must be wary that they do not purposefully seek to seclude groups of people based on their cultural background.
A company that is seeking to expand internationally has a duty to establish their marketing agenda with multiple cultures in mind, so as to prevent bodies of people from getting left out. Marketing strategies have two goals: first of which, keeping with company’s goals, is to benefit in some way consumers on a micro level from person to person and then second, keep all of society as a whole in contentment.
Growth of a business is critical for business success. A firm may grow by developing the market or by developing new products. The Ansoff product and market growth matrix illustrates the two broad dimensions for achieving growth. The Ansoff matrix identifies four specific growth strategies: market penetration, product development, market development and diversification.
Market penetration involves selling existing products to existing consumers. This is a conservative, low risk approach since the product is already on the established market. Product development is the introduction of a new product to existing customers. This can include modifications to an already existing market which can create a product that has more appeal. Market development involves the selling of existing products to new customers in order to identify and build a new clientele base.
This can include new geographical markets, new distribution channels, and different pricing policies that bring the product price within the competence of new market segments. Diversification is the riskiest area for a business. This is where a new product is sold to a new market. There are two type of Diversification; horizontal and vertical. Horizontal diversification focuses more on the product(s) where the business is knowledgeable, whereas vertical diversification focuses more on the introduction of new product into new markets, where the business could have less knowledge of the new market.
Being market pioneer can, more often than not, attract entrepreneurs or investors depending on the benefits of the market. If there is an upside potential and the ability to have a stable market share, many businesses would start to follow in the footsteps of these pioneers. These are more commonly known as Close Followers. These entrants into the market can also be seen as challengers to the Market Pioneers and the Late Followers.
This is because early followers are more than likely to invest a significant amount in Product Research and Development than later entrants. By doing this, it allows businesses to find weaknesses in the products produced before, thus leading to improvements and expansion on the aforementioned product. Therefore, it could also lead to customer preference, which is essential in market success.
Due to the nature of early followers and the research time being later than Market Pioneers, different development strategies are used as opposed to those who entered the market in the beginning, and the same is applied to those who are Late Followers in the market. By having a different strategy, it allows the followers to create their own unique selling point and perhaps target a different audience in comparison to that of the Market Pioneers. Early following into a market can often be encouraged by an established business’ product that is “threatened or has industry-specific supporting assets”.
Market pioneers are known to often open a new market to consumers based on a major innovation. They emphasize these product developments, and in a significant number of cases, studies have shown that early entrants – or pioneers – into a market have serious market-share advantages above all those who enter later. ioneers have the first-mover advantage, and in order to have this advantage, business’ must ensure they have at least one or more of three primary sources:
Technological Leadership, Preemption of Assets or Buyer Switching Costs. Technological Leadership means gaining an advantage through either Research and Development or the “learning curve”. This lets a business use the research and development stage as a key point of selling due to primary research of a new or developed product. Preemption of Assets can help gain an advantage through acquiring scarce assets within a certain market, allowing the first-mover to be able to have control of existing assets rather than those that are created through new technology.
Thus allowing pre-existing information to be used and a lower risk when first entering a new market. By being a first entrant, it is easy to avoid higher switching costs compared to later entrants. For example, those who enter later would have to invest more expenditure in order to encourage customers away from early entrants. However, while Market Pioneers may have the “highest probability of engaging in product development” and lower switching costs, to have the first-mover advantage, it can be more expensive due to product innovation being more costly than product imitation.
It has been found that while Pioneers in both consumer goods and industrial markets have gained “significant sales advantages”, they incur larger disadvantages cost-wise.
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