International and Strategic Marketing (BSM330)

Christian Berger

Second Assignment

Wilson and Gilligan (2005) identify four types of market competitive positioning (market

leaders, followers etc): describe each position and suggest the key strategies appropriate to

each illustrate each position with reference to an organization known to you.

The need to plan exit strategies is often overlooked: explain why the need to withdraw from

a market may be necessary and describe typical exit strategies.

The market leader represents the most dominant form of market interferes in a specific

market industry. Usually, there is in one industry one firm that interacts as the market

leader. It is characterized by having the largest market share. Furthermore, the market

leader determines pace and bases of competition as for example the pricing or advertising

intensity and last its ability to create a benchmark which means that it then influences the

activities of other companies (Wilson and Gilligan, (2006)). For example the sports brand

NIKE is the market leader in the sports industry in the USA but also operating strongly on a

global basis due to an enormous potential purchasing power worldwide. However, regarding

the European market, ADIDAS dominates the sports industry market (Smit, 2006).

There are three key strategies for market leaders in order to achieve and maintain its strong

position. The first strategy is the expansion of the overall market (Wilson and Gilligan, 2006).

According to Wilson and Gilligan (2006), "the company typically stands to gain the most".

This may be emphasized by NIKE´s strategy to target also nonusers by promoting their

sporting clothes also for casual occasions in the leisure time and not only for sports

purposes. Furthermore, the strategy implies the identification of new uses of product

(Wilson and Gilligan, 2006). NIKE expanded in the Golf market, producing golf wear and thus

launching their products in a new area of sports (online). Another point of the expansion of

the overall market strategy is to increase the usage rates of the products (Wilson and

Gilligan, 2006). NIKE developed new running shoes with a special sole, which is connected to

your Ipop. You can read than your speed onto your Ipod (Online).

The second strategy for market leaders is to guard their existing market share. This may be

done in several ways. In order to maintain their market share, companies concentrate on

their significant competitive advantage(s). Furthermore, continuous product innovation and

process is important to increase the competitive effectiveness and value to the customer

(Wilson and Gilligan, 2006). Heavy advertising, strong customer and distributor relations are

important in this strategy. NIKE advertises with very famous sportsmen as for example Tiger

Woods. Furthermore, the web site of NIKE.com provides a selection of various languages

appropriate to each customer all over the world (online).

The third strategy for market leaders in order to remain leaders is the expansion of market

share. This involves heavy advertising, improved distribution, price incentives and new

product development (Wilson and Gilligan, 2006). Furthermore, market leaders may build

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mergers and takeovers as for example in the case of ADIDAS which has bought up the sports

company REEBOK (online). Another opportunity is the geographic expansion and the

distributor expansion (Wilson and Gilligan, 2006).

Market challengers identify themselves as company who always wants to gain more

marketshare and who use aggressive strategies to beat of the market leader (Kotler et al,

2005). According to Dolan (1981) are the used strategies cost intensive and risky if they

challenge the market leader. Nike in the europen market challenges Adidas as the market

leader, they can also attack companies who are smaller such as Nike challenges Puma and

small regional firms (Wilson and Gilligan, 2006). In Germany Intersport always challenges

with Runnerspoint which both are offering sportwearproducts.

We have two different market challengers if we go internationly. ADIDAS is a market

challenger for Nike in the american market and Nike is a challenger for ADIDAS in the

europan sportsmarket (Smit, 2006).

In America ADIDAS challenged Nike with basketball

which is of high importance in the United States (Adidas, 2007). In order to explain the three

strategies which a company can use to attack the leader we will focus on Adidas as an

challenger.

In one of the commercial Adidas challenged Nike with a frontal attack as they show Nikes

strenghts and weaknesses (Kotler et al, 2005). In this case Adidas directly compared its

product with the Nike products and stated that people who are wearing Adidas are

increasingly powerful . Adidas named the company Nike and offended Nike′s product in their

qualit and showed that "normal" people are more powerfull than athlets wearing Nike (clip

online).

The Flank attacks of Nike demonstrates that this strategy is bascially focused on the business

where the competitor is either geographically or in a certain market segment weak (Wilson

and Gilligan, 2006). Nike used the chance to grab the golfmarket and has build up the

"NikeGolf" brand which is now sold in the european market as golfing becomes more

popular (online).

Nike in the european market has Roger Federer and Tiger Woods under its contract for

advertising (online). Both are the best players. Nike encircled Adidas with these Icons, as

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