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).
[...]
Table of Contents
1. Market Leader Strategies
1.1 Expansion of the overall market
1.2 Guarding existing market share
1.3 Expansion of market share
2. Market Challenger Strategies
2.1 Frontal attack
2.2 Flank attack
2.3 Bypass attack
3. Market Follower Strategies
3.1 Follow closely
3.2 Follow at a distance
3.3 Follow selectively
4. Market Nichers
5. Exit Strategies
5.1 Sell to a financial buyer
5.2 Acquisition
5.3 Sell to a key employee
5.4 Sell to all employees via the stock
5.5 Take the company ‘public’
5.6 Manage for life
5.7 Plan for controlled liquidation
Objectives and Topics
The work examines the strategic positioning of companies within a competitive market environment, specifically focusing on the classification into market leaders, challengers, followers, and nichers. Furthermore, it addresses the necessity of planned business exit strategies for companies facing financial challenges or strategic realignment.
- Analysis of market leadership strategies including expansion and share retention.
- Evaluation of competitive tactics employed by market challengers (frontal, flank, and bypass attacks).
- Examination of the follower stance and its operational advantages.
- Identification of niche market characteristics and the importance of market growth potential.
- Comprehensive overview of various business exit strategies.
Excerpt from the Book
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 non-users 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).
Summary of Chapters
1. Market Leader Strategies: This chapter defines the role of a market leader and outlines three primary strategies: expanding the total market, protecting existing market share, and aggressive market share expansion.
2. Market Challenger Strategies: This section analyzes how challengers aim to gain market share through distinct aggressive tactics such as frontal, flank, and bypass attacks, illustrated by the rivalry between Nike and Adidas.
3. Market Follower Strategies: This chapter explains the position of firms that choose to follow the market leader to maintain status quo and profitability, focusing on imitation rather than costly innovation.
4. Market Nichers: This section describes firms that operate in specialized market segments, avoiding direct conflict with larger competitors by building high customer loyalty and brand awareness.
5. Exit Strategies: The final chapter provides a comprehensive list of seven methods for selling or liquidating a business, highlighting the importance of planning for exits to achieve the best financial outcome.
Key Terms
Market Leader, Market Challenger, Market Follower, Market Nicher, Market Share, Competitive Advantage, Product Innovation, Frontal Attack, Flank Attack, Bypass Attack, Exit Strategy, Acquisition, Liquidation, Brand Awareness, Customer Loyalty.
Frequently Asked Questions
What is the core focus of this publication?
The work provides an overview of market competitive positioning strategies and the critical importance of planning business exit strategies.
Which categories of market participants are analyzed?
The text classifies companies into four distinct groups: market leaders, market challengers, market followers, and market nichers.
What is the primary objective of the analysis?
The goal is to describe appropriate strategies for different market positions and explain why businesses must proactively plan for potential market withdrawal.
Which scientific methodology is applied?
The publication utilizes a literature-based analysis, synthesizing concepts from established marketing theorists like Wilson and Gilligan alongside practical business case studies.
What topics are discussed in the main body?
The main body details tactical strategies for market leaders, specific attack methods for challengers, imitation strategies for followers, and methods for selling or liquidating a company.
Which keywords best characterize this work?
The work is characterized by terms such as market positioning, competitive strategies, business acquisition, market share, and exit planning.
How do market nichers survive against larger competitors?
Nichers avoid direct competition by focusing on specific, underserved segments where they can establish strong brand loyalty and satisfy niche customer needs.
Why might a company choose a bypass attack?
A bypass attack is used to avoid direct confrontation, focusing instead on future-oriented opportunities or segments where the leader is currently weak.
What are the benefits of being a market follower?
Followers benefit from lower research and development costs by imitating the products of market leaders, allowing them to prioritize profitability over market share.
What is the significance of the Adidas acquisition of Reebok?
This case study serves as a practical example of a strategic acquisition designed to enter new markets and strengthen a competitor's position in the global sports industry.
- Quote paper
- Christian Berger (Author), 2008, The 4 types of market competitive positioning and its key strategies, Munich, GRIN Verlag, https://www.grin.com/document/118064
