Marketing Strategy and Competitive Positioning pdf ebook

Figure 5.8 
Future 
competitor 
strategies
Predict
competitors’
future
strategies
What might the competition do?
What under-utilised resources do they have?
How will they react to our actions?
Key indicators:
Past strategies 
Past reactions 
Recent resource acquisitions
Past successes and failures
Changes in ownership

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CHOOSING GOOD COMPETITORS
The aim is to force a company to look beyond its own moves and towards those of its 
competitors and, like a great player of chess, think several moves ahead. It involves a firm 
thinking of its moves in a broad, strategic framework rather than the incremental manner in 
which strategies often emerge. Alternatively, by following a series of seemingly small incre-
mental shifts in pricing and promotion, a firm could be seen as attacking a particular mar-
ket, and incur the wrath of major players. It is clearly better for A to consider the alternative 
moves carefully rather than make a series of moves, each one of which makes local sense, 
without regard to B’s counter-moves and the long-term consequences of incremental action.
5.3 
Choosing good competitors 
When a company enters a market it also, in effect, chooses its competitors. In the selection 
of new opportunities, therefore, it is important to realise that not all competitors are equal. 
Just as markets can be attractive and a company’s strengths can fit those markets, so com-
petitors can be attractive or unattractive. Porter (1985) lists the characteristics that make a 
good competitor. In Figure 5.9 these features are organised to show how certain features of 
competitors can make them attractive.
Companies that have reached competitive maturity understand the market they operate 
in and will enhance, rather than destabilise, the environment of the strategic group. A good 
competitor can help promote industry stability by understanding the rules that govern the 
market, and by having realistic assumptions about the industry and its relative position in 
it. In this way, a good competitor is unlikely to embark on strategies that are unprofitable 
and that may result in zero-sum competition, such as precipitating price wars or other 
unprofitable practices. 
A good competitor can support the industry structure, if it invests in developing its 
own product and enhancing quality differentiation and market development, rather than 
confrontational price-cutting or promotional strategies. In that way, barriers to entry are 
enhanced as the overall quality of incumbent competition is heightened. Additionally, the 
overall impact of a competitor or new entrant is diminished, as a far clearer segmentation 
and positioning landscape exists. The global pharmaceutical industry tends to have this 
structure, where legislation and the clear differentiation of drugs allows a relatively large 
number of medium-sized companies to survive in many leading markets. 
A further advantage of a company that is competitively mature is that it provides steady 
pressure on competitors to become more operationally efficient. It provides respectability