Page 300 - DMGT408DMGT203_Marketing Management

Unit 13: Creating Competitive Advantage

Notes

Task You are a consultant and have been hired by Airtel to conduct a competitive
analysis. Prepare a report of your analysis.

Self Assessment

State whether the following statements are true or false:
1. The greater the competitive intensity in an industry, the more attractive it is to current or
would-be entrants.

2. The best scenario for a company is when the entry barriers in an industry is low but exit
barriers are high.
3. Availability of substitutes puts a limit on prices companies can charge and the profit
margins are restricted.

13.2 Competitive Strategies and PLC Stages

The three basic performance objectives, companies choose keeping in view the competition
include share position, sales growth, and profit performance. Depending on the prevailing and
anticipated market conditions, some companies will adopt offensive strategies and some will
choose defensive strategies to suit objectives. Businesses evaluate market attractiveness and
competitive advantage before making a choice of strategic moves.
Market Attractiveness: The factors that make a market attractive include market size, market
growth; competitive intensity, profit potential, accessibility to market, and fit with company’s
core competencies. These aspects can be grouped under three heads: Market Forces, Competition,
and Market Access.

Figure 13.3: Elements Shaping Market Attractiveness

Market size
Market Forces Growth rate
Buyer power

No. of Competitors
Market Competitive Price rivalry
Attractiveness Intensity
Ease of entry

Customer familiarity
Market Access Channel access
Sales requirements

Competitive Advantage: There are various elements that determine competitive advantage of a
business and include differentiation advantage, cost advantage, and marketing advantage.

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