Marketing Strategy and Competitive Positioning pdf ebook

Competitors’ strategic focus
Most successful companies attempt to build strategies on the differential advantage they 
have over others in the market. This is an important consideration in two ways: it is nec-
essary to base differential advantage on customer targets, and avoid basing competitive 
strategy on trying to build strengths where competitors are relatively and traditionally very 
strong. For instance, in the jewellery trade it is possible to compete through design or dis-
tribution, but impossible to compete with De Beers through securing one’s own supply of 
uncut diamonds.
There are two main routes to creating a competitive advantage. The first is through low 
costs relative to competitors. The second is through providing valued uniqueness, differenti-
ated products and services that customers will be willing to pay for.
Indicators of competitors adopting a low-cost focus include attention to overheads in 
the balance sheet, the vigour with which they pursue low-cost factor inputs and the tight 
financial controls they exert on all functions and activities. The cost leadership route is a 
tough one for any firm to follow successfully and requires close, relentless attention to all 
cost drivers. As noted previously, in the UK grocery market Aldi and Lidl have adopted 
this rigorous approach, restricting product lines and providing a largely ‘no-frills’ service. 
Ryanair, in the budget airline sector, has also been successful in pursuing this approach – an 
approach well matched to an extremely price-sensitive segment.

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CHAPTER 5 COMPETITOR ANALYSIS
Providing something different, but of value, to customers is a route to creating com-
petitive advantage that all players in a market can adopt. The creative aspect of this 
strategy is to identify those differentiating features on which the firm has, or can, build 
a defensible edge. Signals of differentiation will be as varied as the means of differentia-
tion. Greater emphasis on customer service, added features to the product, special deals 
for volume or continued customer loyalty schemes are all means of differentiation. All 
are highly visible to competitors and indicate the basis on which a given supplier has 
chosen to compete.