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1
CONTENT
 Introduction
 Hypothetical market structure
 Market followers
 Market-follower strategies
 Four broad strategies
 Advantages
 References
2
INTRODUCTION
The rule of business is that when you are a
market leader, there are definitely going to be
market followers. Many companies come out
with a market follower strategy. In fact, in
today’s world the competency of all
companies are so high that innovations are
quickly copied or imitated in different
formats.
3
HYPOTHETICAL MARKET
STRUCTURE
4
40%
30%
20%
10%
Market Leader
Market Challengers
Market Followers
Market Nichers
MARKET FOLLOWERS
A market follower position can be profitable
as it may be possible to take a share of the large
market created by the market leader, for example by
copying the brand leader at a lower price, or making
something better or cheaper.
5
“Leaders think and talk about the
solutions. Followers think an talk about
their problems”
-Brian Tracy-
MARKET-FOLLOWER STRATEGIES
Each follower tries to bring distinctive advantages
to its target market - location, services, financing.
Four Broad Strategies
• Counterfeiter
• Cloner
• Imitator
• Adopter
6
Four Broad Strategies
 Counterfeiter
Copies the leader’s product and packages and
sells it on the black market.
E.g. : pirated music/ movie CDs
 Cloner
Copies the leader’s product s as it is as well as
name, packaging with slight variations.
E.g. the IBM PC clones
7
Four Broad Strategies..(cont..)
 Imitator
Copies some of the things from leader’s product but
maintains difference in packaging, and other factors.
E.g. car manufacturers imitate the style of one
another.
 Adapter
Launches improved products over that of the
innovator’s.
E.g. many Japanese firms are excellent adapters
initially
before into challengers and eventually
leaders
8
ADVANTAGES
 Learn from the market leader’s
experience
 Copy or improve on the leader’s
offerings
 Strong profitability
9
References..
 Principles and Practice of Marketing -By Jim Blythe
 Strategic Marketing: Creating Competitive
Advantage - By Douglas West, John Ford, Essam
Ibrahim
 Strategic Marketing Planning - By Colin Gilligan,
Richard M.S. Wilson
 Market-Driven Management: Strategic and
Operational Marketing - By Jean-Jacques Lambin,
Isabelle Schuiling
10
11
12

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Competitive strategies for market followers

  • 1. 1
  • 2. CONTENT  Introduction  Hypothetical market structure  Market followers  Market-follower strategies  Four broad strategies  Advantages  References 2
  • 3. INTRODUCTION The rule of business is that when you are a market leader, there are definitely going to be market followers. Many companies come out with a market follower strategy. In fact, in today’s world the competency of all companies are so high that innovations are quickly copied or imitated in different formats. 3
  • 4. HYPOTHETICAL MARKET STRUCTURE 4 40% 30% 20% 10% Market Leader Market Challengers Market Followers Market Nichers
  • 5. MARKET FOLLOWERS A market follower position can be profitable as it may be possible to take a share of the large market created by the market leader, for example by copying the brand leader at a lower price, or making something better or cheaper. 5 “Leaders think and talk about the solutions. Followers think an talk about their problems” -Brian Tracy-
  • 6. MARKET-FOLLOWER STRATEGIES Each follower tries to bring distinctive advantages to its target market - location, services, financing. Four Broad Strategies • Counterfeiter • Cloner • Imitator • Adopter 6
  • 7. Four Broad Strategies  Counterfeiter Copies the leader’s product and packages and sells it on the black market. E.g. : pirated music/ movie CDs  Cloner Copies the leader’s product s as it is as well as name, packaging with slight variations. E.g. the IBM PC clones 7
  • 8. Four Broad Strategies..(cont..)  Imitator Copies some of the things from leader’s product but maintains difference in packaging, and other factors. E.g. car manufacturers imitate the style of one another.  Adapter Launches improved products over that of the innovator’s. E.g. many Japanese firms are excellent adapters initially before into challengers and eventually leaders 8
  • 9. ADVANTAGES  Learn from the market leader’s experience  Copy or improve on the leader’s offerings  Strong profitability 9
  • 10. References..  Principles and Practice of Marketing -By Jim Blythe  Strategic Marketing: Creating Competitive Advantage - By Douglas West, John Ford, Essam Ibrahim  Strategic Marketing Planning - By Colin Gilligan, Richard M.S. Wilson  Market-Driven Management: Strategic and Operational Marketing - By Jean-Jacques Lambin, Isabelle Schuiling 10
  • 11. 11
  • 12. 12