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Unit-II Competition Management and Positioning

Market competition in Kannada is a market system in which several industries that provide
the same goods or services to consumers compete with each other. This competition motivates the
enterprises to offer better, cheaper products and give more options to the consumers.

Types of Market Competition:

1. Perfect Competition:

• There will be many vendors in terms of numbers.

• All vendors sell the same (equal) products.

• There will be no barriers to entry and exit to the market.

2. Monopolistic Competition:

• Many organizations offer their products and services in the market.

• Every organization tries to differentiate its products from others (for example, through
branding).

• Brand loyalty allows it to influence other organizations.

3. Oligopoly:

• There are only a few businesses in the market that provide a particular commodity or
service.

• These firms have a significant influence on market prices and supply.

4. Monopoly:

• There is only one entity in the market that provides a particular commodity or service.

• Alternative products are not available.

• A monopoly firm has complete control over the price and supply of the product.
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Key Features of the Perfect Competition:

• Many vendors and customers:

There are so many small companies and buyers in the market, no one can decide the price.

• Homogeneous Products:

Sellers sell similar or similar products, so customers can't decide which company's product to buy.

• No barriers to entry and exit:

Any company can enter or exit the market.

• Perfect market information:

Buyers and sellers will have complete information about price, quality and technology.

Porter's Competitive Framework

Porter's Competitive Framework considers five key forces to analyze the intensity of
competition in an industry: the threat of entry into new ventures, the threat of alternative products
or services, the threat of suppliers, the threat of buyers, and the intense competition of existing
competitors within the industry.

Porter's Five Forces

1. Threat of new entrants:

• This indicates how easy or difficult it is for new competitors to enter the market.

• If there are fewer barriers (for example, entry does not require a large capital), new
participants can easily enter and increase the competition.
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2. Threat of Substitute Products or Services:

• This shows how much other types of products or services are able to meet customer
demand.

• If alternatives are readily available and they are cheaper, it will be a threat to the
existing industry.

3. Bargaining Power of Suppliers:

• It specifies how much prices suppliers can fix for their raw materials or services.

• If the suppliers' choices are fewer or the products they provide are unique, their threat
power will be higher.

4. Bargaining Power of Buyers:

• It explains how much buyers can influence the prices or quality of the final product.

• If there are a small number of buyers or if they buy in large quantities, their threat
force will be higher.

5. Rivalry Among Existing Competitors:

• It examines the intensity of competition between current competitors in the market.

• This includes price competition among major industries, advertising competition, new
product launches, and customer service competition.

Here are C.K. Prahlad and Gary Hamel's views on the contest:

Core Competencies Critical to Competitive Advantage:

• He emphasized that beyond the traditional competition analysis, companies should focus
on their inherent strengths and competencies.
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• Core competencies are a collection of skills, technologies and knowledge that

are unique to the company.

• Developing and harnessing these capabilities is critical to achieving long-term competitive

advantage.

Competing for the Future:

• Competition is not just about current market share, but about competing for future
opportunities.

• Companies must develop insight into the future and intellectual leadership.

• For this they should not focus only on their existing product and business segments.

Restructuring of the corporation structure:

• The company should not function as a portfolio of independent business units but as
a portfolio of core competencies.

• He stated that the focus should be on building long-term competitiveness, rather than short-
term gains.

Failure of Traditional Strategy:

• He noted that the traditional management philosophy has failed because it focuses on short-
term gains and has an array of strategies that undermine organized competitiveness.

Summary of Key Points:

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• Focal point: Inner strengths (core competencies).

• Vision: Future Competition and Opportunities.

• Goal: To be a future leader, beyond market share

Designing competitive strategies

What are the competitive strategies?

Competitive strategies are a set of policies and procedures used by a business to gain a competitive
advantage in the market. It is the process of identifying and implementing measures that enable a
business to improve its competitive position. Businesses can use various competitive strategies to
increase the value of their products and services to customers, investors, and employees. They also
implement these strategies to obtain sustainable revenue streams.

Why are competitive strategies important?

Competitive strategies are important because they affect the overall strategy of the business. If a
business does not have a competitive strategy, it may not find a unique advantage over its
competitors. Competitive strategy is important in inventing and developing new ideas for the
products and services that a company can offer. Other benefits of executing a competitive strategy
include:

Exploring new opportunities

Maintaining customer loyalty with good products and services

Innovation to stay relevant on technological changes in the market

4 Types of Competitive Strategies

Here are four types of competitive strategies and an example of each:

1. Cost leadership strategy

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Cost Leadership Competitive strategy puts the prices of products and services lower than
competitors, thereby encouraging consumers to buy lower-priced products to save money.
Businesses use a cost leadership strategy in industries with high price elasticity, such as energy and
transportation. This competitive strategy is more effective for companies that can produce large
quantities of products at a lower cost. Production methods, high capacity utilization and working

2. Different leadership strategy

Businesses can use a different leadership strategy to differentiate their products from competitors
by emphasizing product features. This strategy may involve the design or function of the product. A
company that has been operating for a while can use this technique to show that the original offer
is better than the new product. Alternatively, the new company can use this strategy to show that
the new invention is more beneficial than the existing one. The goal is to attract more customers
through unique features and quality while preventing them from gaining market share.

3. Cost Centric Strategy

Similar to a cost leadership strategy, a cost-focused strategy involves catering to a specific market.
This strategy involves trying to offer a lower price, but it also seeks to target a unique market
segment with specific priorities and needs. When a company implements a cost-focused strategy, it
can more easily establish brand awareness in a specific geographic market.

4. Differentiation Focus Strategy

Similar to a differentiation leadership strategy, a differentiation focus strategy seeks to highlight

unique product characteristics and features. The difference between them is that a differentiation
leadership strategy may involve appealing to a broader market, whereas a differentiation focus
strategy involves appealing to a specific market segment. This is because it tries to highlight how
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the company's offerings are unique compared to the contributions of its competitors. How do you
execute a competitive strategy?

Every organization follows certain basic steps while developing its competitive strategy. They relate
to the scope and scope of the business as well as its vision and products.

Below you can find the main steps that a company goes through to build a competitive strategy:

1. Define the business purpose of the organization.

It is important to recognize what the organization does to contribute to the lives and experiences of
customers. This is the reason why consumers buy its products or services.

2. Explain the core competencies.

Next, define the company's unique tangible and tangible characteristics. These could be the speed
of last-minute product and service delivery, staff expertise, product design – anything that makes
the client choose you over your competitors.

3. Decide on the primary business growth methodology.

Next, the business owner must decide the growth strategy and direction of the business. Clearly,
the acquisition will require a different competitive strategy than market expansion.

4. Establishing key market priorities and products.

At this stage, companies determine the products and market segments that contribute significantly
to revenue and identify what still needs to be improved and refined in that regard.

5. Specify future goals.

Goals should describe the things the company strives to achieve, properly considering its mission
and vision .

6. Identify potential obstacles.

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Companies need to be proactive enough to anticipate future problems and solve them quickly when
the time comes. This way, they can assess the compatibility of their competitive strategy with a
particular disruption in the long run.

7. Rethink existing marketing strategies.

The company's market focus and current objectives should be aligned with its competitive strategy,
otherwise they must be revised.

8. Harness the power of competitive intelligence.

Note that competitive intelligence, which is a fairly modern concept, involves collecting data about
competitors and analyzing it internally. Note that it often involves publicly available information in
accordance with data protection policies. For example, reviewing your competitors' annual reports
can help evaluate their market and financial conditions.

Market Positioning

Market positioning in Kannada is the process of creating a specific identity or image in the minds
of consumers for a product, service or brand. It determines how you want to make your product
stand out from competitors' products and deliver its unique value to the customers.

Key Factors of Market Positioning:

• Customer Perception:

It influences how customers think about your product compared to competitors.

• Brand Identity:

Creating a unique identity or image for your brand so that customers perceive it in a certain way.

• Competitive Advantage:
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This will help you differentiate your product from others in the market and gain a competitive
advantage in the market.

• Value Communication:

The purpose is to clearly convey to customers the unique value of your offering.

Examples:

• A car manufacturer can promote its brand as a symbol of luxury.

• A battery manufacturer can position its batteries as being the most reliable and durable.

• A retailer can position himself as a place where he offers home appliances at a lower price.

Positioning Services

"Positioning Services" in Kannada means "Positioning Services" or "Positioning for Services". Its basic
meaning is to make a particular brand or service stand out in the minds of consumers when compared
to competing services.

In more detail:

• Getting a place in the minds of the customer:

Unlike other services in the market, it is about deciding how the customer should perceive its service.

• Establishing Uniqueness:

To show customers that its service is better or different from others through the benefits, characteristics
or experiences that its services provide.
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• For the target market:

A service creates its unique niche to attract a specific group of customers (target market).

In short, "Positioning Services" is the process of establishing services in the market in a way that
makes a unique and special impression to the customer.

Positioning Options

"Positioning Options" in Kannada can be said to be "Positioning Options" or "Positioning

Methods". It means the different ways or techniques available to make a product or
brand stand out in the minds of the customers in the market.

Some Positioning Options/Methods:

1. Quality-based:

Focusing on product quality.

2. Price-based:

Positioning the product at a lower price or higher price in the market.

3. Problem-Solving:

The emphasis is on the market as a product that solves a customer's specific problem.

4. Prestige/Social Approval:

Positioning the product as giving prestige or social recognition.

5. Specific Use:

Positioning that the product can only be used for a specific use or purpose.
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6. Specific Audience:

Targeting and positioning a specific group of customers.

In the context of trading and sales, positioning and repositioning means establishing or
changing the position of a particular brand, product or service in the mind of the customer.

Positioning and Repositioning

Positioning (positioning)

Positioning is deciding what position your product should occupy in the minds of the customer. In other
words, you decide what the customer should remember when comparing your product to competitors'
products.

Example:

• A company can position its bicycles as "environmentally friendly" or "safe for children".

• A luxury car brand can position itself as "the most expensive and highest-quality car".

Repositioning

Repositioning is the process of changing the existing positioning of a product or brand. This may be
necessary to attract new customers or respond to new trends in the market.

Example:

• A company that makes fitness watches can change its positioning by promoting its watches as
only for athletes in the past, then promoting them as a health tool for everyone.

• The brand, which was previously considered "old-fashioned", can reposition its brand as "modern"
and "relevant" by introducing new designs.
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Difference Between Positioning and Repositioning

Positioning Repositioning
Feature

Objectives Establishing a place in the Changing the existing

customer's mind from the position.
very beginning.

Reason Introducing a new product Decline in sales, entry into a

to the market. new market or change in
consumer opinion.

Process Continuously delivering a Changing the old idea in the

specific message to the mind of the customer through
customer. a new message.

'Product Positioning

'Product Positioning' in Kannada is known as 'Product Positioning'. It means how a brand or

product gets a place among the competing products in the minds of its target audience. It is a
powerful marketing concept that includes not just the product (characteristics) but also the brand
(value) and the rationale elements.

Key Elements of Product Positioning:

• Target Audience:

Deciding who you want to buy your product from.

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• Competitive Analysis:

Understand how your competitors are positioned in the market.

• Typical difference:

Clarifying how your product differs from competing products.

• Message:

Creating a clear and impactful message to convey the uniqueness of your product to the target
audience.

For example:

Send Pulse gives examples of how well-known brands in technology, health, or other
fields position their products. By looking at these examples, you can understand how your product
can be better positioned in the market.