Successful strategy amounts to implementing plans that meet customer
need while effectively dealing with rival competitors. This section exam-
ines strategies relative to the competition.
Competitive marketing strategy draws heavily on military strategy.
Indeed, many strategic principles can be traced to the analogy of the market
place as a battlefield with competitors as enemy forces. It could be argued
that Sun Tsu^2 – ‘The Art of War’, provides as much of an insight into the prin-
ciples of modern day strategic marketing as it does to military campaigns.
Market position
The position of the organisation (or product) within a given market will
clearly influence the strategic options available. For example, when com-
paring the market leader with a smaller ‘niche’ competitor, it is likely that
marked differences exist in: aims, capabilities and resources. When con-
sidering a market, competitors break down into four general categories:
market leaders, market challengers, market followers and market nichers.
Each will be examined in turn.
Market leaders
A market leader is dominant within the given industry or segment. This
dominance is normally due to market share. However, some organisa-
tions may achieve ‘leadership’ through innovation or technical expertise.
Additionally, the organisation may only be a leader in a given segment
(e.g. geographic area). Be careful how the term ‘market’ is defined when
talking about market leaders.
The market leader will be a constant target for aggressive competitors
and must remain vigilant and proactive. Common strategies include:
● Expanding the market: If the total market expands, the leader tends to
gain the largest share of this expansion. This can be achieved by find-
ing new users or new uses for the products and by encouraging more
use by existing customers.
● Offensive strategy: By aggressively pursuing market share, the fight is
taken to the competitors.
● Defensive strategy: Equally, it is important to protect your existing cus-
tomer base and ensure that market share is retained.
Offensive and defensive strategies are applicable to all industry ‘players’
not just market leaders. These strategies are more fully discussed in sec-
tion Offensive and defensive strategies.
Market challengers
Market challengers will seek confrontation and aggressively pursue market
share. Often, such organisations are large and well resourced. They are
Strategy formulation 161(^2) Sun Tsu – ‘The Art of War’ – A classic work defining ancient military tactics and philosophy.