Attacking a leader is always difficult. Some strategists recommend attacking a leader head-on by targeting its strengths. Other strategists disagree and recommend flanking and attempting to avoid the leader's strengths.
A market leader as defined here generally has the largest market share in the relevant product and market and usually leads the other firms in price changes, new product introductions, distribution coverage, and promotional intensity. Market leaders may also have products that generally hold a distinctive position in consumers' minds. These strengths and competitive advantages can be formidable when used by a savvy and seasoned firm. Trying to attack the leader on its strengths requires point-of-differences in brands, sophisticated marketing positioning, and "deep pockets" for the challenger.
Before you begin your analysis, think of your most recent purchases. Were you swayed in any way by the design or looks of the product, or were you simply focusing on the intended performance of the product?
Now think about those products whose performance is rated lower than their major competitors. What do they need to do to get their product in the hands of the target customer? Is it the glitz and glitter that can make a difference?
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When I think of my most recent purchases, grocery items and gas for the car, I was simply focusing the intended performance of the product. Those products whose performance is rated lower than their major competitors have two options if they want to get their product in the hands of the target customer. Either they improve their performance substantially, or they reduce their prices significantly. Normally these products have to change their manufacturing process (1). The new process should either improve the quality of the products ...
The answer to this problem explains performance vs glitz of products. The references related to the answer are also included.
Attacking a Category Leader
Respond to the following:
Attack, Follow or Create a Niche Collapse
Total views: 3 (Your views: 1). My most recent purchase was based on habit. I bought the usual brand that I buy because of its ability to meet and exceed my expectations.
To gain some to the target customer base a market challenger must first define the strategic objective and opponent(s). Once choice is to attack the market leader at great risk but high reward if successful. A challenger can also set their sights on companies of similar size that are not satisfying the consumer or lastly overtake smaller firms.
The next step would be to choose an attack strategy.
A general attack strategy. The attack options will be to match the attacker's product (frontal attack), fill gaps that have been developed (flank attack), launch a grad offense on several fronts (encirclement attack), create new products that are diversified into new geographical markets (bypass attack), and intermittent attacks that harasses the opponent to eventually secure permanent footholds (guerrilla attacks). A challenger should combine several, more specific, strategies to improve its position over time. How they go about the attack determines how successful the attacks will be in putting their product into the hands of the target customer.
If an attack is not an option then a firm can choose to follow or create a niche.
A market follower strategy. A follower earns less than a leader, usually not a rewarding path at all. However the stability of the product is there because the advantages to the target market is to bring location, services, and financing while keeping costs low and quality/services high.
A market niche strategy. A company can be a leader in a small market by offering high value, charging premium prices, maintaining lower manufacturing costs which create a strong corporate culture and vision. Market-nichers must continuously create new ones to avoid weakening due to be attacked or the niche drying up.
Glitz can catch the eye of the consumer but it's not enough for the market challenger to gain control of the market. The performance of the product ultimately will be the deciding factor of catching up to or passing the market leader.View Full Posting Details