Page 301 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes According to L. W. Philips, D. R. Chang, and R. D. Buzzell, other forces go into shaping these
competitive advantage elements of a business. The three dimensions of competitive advantage
shown (Figure 13.4) include three forces underlying each element of competitive advantage and
include product related aspects, cost related factors, and competencies in various areas of
marketing functions.
Figure 13.4: Factors Influencing Competitive Advantage

Product quality
Differentiation Advantage Service quality
Brand image

Unit cost
Competitive Transaction
Advantage Cost Advantage cost
Marketing costs

Market share
Marketing Advantage Brand awareness
Distribution

13.2.1 Offensive Strategies

Offensive strategies are most likely to be adopted by competing businesses during growth stage
of product-market life cycle (early growth and rapid growth stages) and aim at sales growth and
increase market share, and improve profit position in future.
Defensive strategies are more likely to be adopted during later stages of product-market life
cycle (late growth, early and late maturity) and usually focus at protecting market share and
increase short-term sales returns and profits.

Figure 13.5: Strategy Choice Based on Portfolio Analysis
Competitive Advantage
Low Medium High

(1) (2) (3)
High
Offensive Offensive Offensive OR
Defensive

(4) (5) (6)
Market Medium Offensive OR Offensive OR
Offensive OR
Attractiveness Defensive Defensive Defensive

(7) (8) (9)
Low Defensive Defensive
Defensive

Adoption of offensive strategy depends on a combination of market attractiveness and
competitive advantage. Companies are more likely to adopt offensive strategies to gain

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