(1) Total cost leadership strategy.
Companies strive to reduce production and distribution costs and make prices lower than competitors' product prices to increase market share.
(2) Differentiation strategy.
The company strives to develop differentiated product lines and marketing projects to make its products and marketing services unique and become a leader in the same industry.
(3) Focus on strategy.
Enterprises concentrate their efforts on certain market segments. rather than spreading power evenly across the market. Focus strategies can be divided into cost focus and differentiation focus strategies.
Enterprises determine their competitive position in the market based on the above competitive positioning strategy. Competitors can be divided into: leaders, challengers, followers, and niche players.
The market leader refers to the enterprise with the highest market share in the relevant product market. In China, there are Changhong in the color TV industry, Haier in the refrigerator industry, and Little Swan in the washing machine industry. Market challengers and market followers refer to those companies that occupy a secondary position in the market. In China, companies such as Panda, Konka, and Haier in the color TV industry, and Meiling in the refrigerator industry, etc. Market niche players refer to companies that maximize profits through specialized operations in markets that are ignored by large companies.
A diversified enterprise group may be in a dominant position in one industry market and a follower position in another industry market, such as Haier Group and Changhong Group. The different positions of competitors in the industry determine the differences in the competitive strategies they choose.
(1) Marketing objectives and competitive strategies of market leaders.
Market leaders want to maintain their number one position in the market. With the marketing goals of expanding market size, increasing market share and maintaining market share, you can choose an enveloping competition strategy or a defensive competition strategy. In order to expand the original results and achieve the goal of expanding market size and increasing share, an encirclement strategy is adopted. Leaders use their unique advantages in capital and technology, customer base, corporate image, leadership capabilities, etc. to create new products, develop new uses for products, increase the frequency of product use, expand the number of customers, and develop related markets. Surround or attack product markets that are temporarily at a disadvantage or in a secondary position. For example, Little Swan Group attacked household kitchenware after taking the leading position in the washing machine industry. For the purpose of market share maintenance, defensive strategies can be adopted. Use the company's economies of scale, low cost, and strength to build a market barrier to prevent intruders from invading.
Obviously, the encircling competition strategy is a dynamic and positive strategy, but it can easily lead to industry monopoly and is not conducive to the dynamic balance of the industry. The defensive competitive strategy is a relatively static and conservative strategy. If not mastered well, it will be vulnerable to powerful attacks by emerging competitors. Therefore, leaders should adopt different strategies at the right time to maintain a certain level of competition and maintain coordinated development of the entire industry.
(2) Marketing objectives and competitive strategies of market challengers.
In order to strive for the first position in the market, market challengers constantly attack the dominant players. Therefore, offensive strategy is the most commonly used strategy adopted by market challengers. Either attack the dominant player with low cost, unique products, or specialize in markets ignored by the dominant player. In order to achieve the purpose of attacking and obtain a predetermined rate of return, depending on the size, strength and technical level of the enterprise, challengers can adopt three main forms: frontal confrontation, flank attack, and rear attack at the right time. For example, Haier Group adopts a flanking attack strategy to launch new products to fill market gaps and challenge the dominant players in the color TV and washing machine markets.
(3) The goals and competitive strategies of market followers and market nichers.
In order to obtain market benefits, avoid fierce competition with market leaders, and maintain a state of "conscious coexistence" with market leaders, market followers and market niche players generally adapt to or follow the competition. Strategy, professional business strategy.
Optional following strategies generally include close following, distance following, optional following, etc. Adaptation strategies generally include forming an alliance with the first player, attacking the second player, or forming a group with a lower-ranking player. Optional professional management strategies include product specialization, market specialization, etc. Specific to every enterprise, what needs to be considered is how to find competitive advantages and cultivate the core competitiveness of the enterprise. Although the products of each company are completely different, for almost all companies, it is possible to compare its products with those of its competitors in order to determine the unique product strengths that can expand market share. To do this, one way is to systematically compare the company's products with each competitor's products, that is, disassemble an assembled product and analyze the differences in each component to determine where or where Comparative advantages can be achieved in terms of price or cost.
Suppose a component of your product costs more, but its quality is better than that of your competitors. Should you increase the retail price of your product to cover the additional cost of this expensive component? You must discuss this with your marketing staff. If they disapprove of the price increase, then the salesperson should use this quality advantage as the focus of their sales pitch.
An interesting example of comparative advantage occurs in the color film industry. Japan's color film market for amateur photography is controlled by three companies, two of which are Japanese, the dominant ones Fuji and Sakura. In the past 15 years, Fujifilm's market has continued to expand, and Sakura Film, which once accounted for more than half of the market in the early 1950s, has gradually lost its market share to its two competitors. The test results show that the problem is not the product. Quality, but Sakura Film Company used an inappropriate term on the product's trademark. In Japanese, cherry blossoms evoke the association of soft colors, blurred outlines, and pink. On the contrary, the name of Fuji film naturally evokes the clear blue sky and white snow on Japan's sacred mountains. Sakura's serious failure was its unfortunate image, and although the company made great efforts to counteract this negative image through advertising, the results were in vain.
Finally, Sakura Film Company began to analyze whether it was possible to find opportunities to develop competitive advantages from the perspective of structure, economics, and customers. They actually found a clue. Sakura found that customers who bought film were becoming more cost-conscious. Technicians who develop films report that when amateur photographers use a 36-shot film, there are always 1-2 unexposed pictures left, but at the same time they always try to take as many pictures as possible when using a 20-shot film. Here's Sakura's opportunity. The company decided to produce 24-sheet rolls of film at the same price as competitors' 20-sheet rolls. The added cost of this product is very low, but once his main competitors follow his path, they will face penalties that cannot be ignored. If competitors lower the price of a roll of 20 sheets, Sakura will respond. Sakura's goals in doing this are two-fold. First, it will promote the growth of users' cost awareness. Second, and more importantly, it will shift people's attention from the brand image direction, where they cannot win, to the economic aspect, where they have a comparative advantage.
Sakura Company has found its own competitive advantages and focuses on cultivating the core competitiveness of the company. The so-called core capabilities of an enterprise refer to the ability of an enterprise to develop unique products, develop unique technologies and invent unique marketing methods. It takes the technical capabilities of the enterprise as the core and obtains the ability to maintain a sustainable competitive advantage through the interaction of the enterprise's strategic decision-making, production and manufacturing, marketing, and internal organization and coordination management. It is established and developed by the enterprise in its development process. A complementary system of assets and knowledge. At the same time, the strength of an enterprise's core capabilities is largely affected by the industrial technology and market dynamics that the enterprise faces. If the competition among enterprises in the market is mainly reflected in the competition of product price and performance in the short term, then in the long term it is a contest of core capabilities.
Durant's answer was: "Next time we go to Detroit, we will go to the place you recommended." Then Durant instructed Sloan to buy the land without even asking the price. The historical significance of this move is very obvious, because this may eventually be the headquarters of General Motors. Durant made his decision as casually as ordering a box of paper clips—without analyzing the variables of the real estate market, taxes, and location. This approach seems unreasonable today. Durant's autocratic and casual management style and personal manipulation of decision-making made the originally taciturn Sloan very dissatisfied and was ostracized for this.
So when Durant left office, Sloan’s first goal was to systematize and promote the practice of “encouraging employees to raise objections in a timely manner”. His goal is to make the atmosphere at GM more democratic so that opinions can be heard; it is not to cultivate a group of people who are obedient to him. After Durant left, DuPont, GM's then chairman of the board, succeeded as president of the company and became the immediate boss of Sloan, then the company's executive vice president. He had read Sloan's "Organization Studies" and was deeply impressed by Sloan's methodical and concise writing style. Sloan encouraged a free exchange of ideas, and his introduction of this into the company's change program was strongly supported by DuPont.
At General Motors at the time, Charles Kettering began experimenting with air-cooled engines, which he hoped would replace water-cooled engines and make them the standard in the automotive industry. In the years when the automobile industry was forming and developing, a group of mechanical masters and scientific giants appeared at the forefront of the industry, and Kettering was one of the outstanding representatives.
Water-cooled engines require elaborate water piping systems and water tanks; in theory, air-cooled engines appear to be more efficient and less expensive. But months before the air-cooled engine rolled onto the company's production line, Sloan was skeptical. For him, a pragmatist, it was gambling on a whole new system. He believes that for such a thorough and radical reform, the company should try it first and then gradually introduce it to the automobile production line, and it should start with the lowest-priced Chevrolet cars. But his executive committee and DuPont, who had always supported Sloan, were more inclined to drastic reforms and ordered the discontinuation of all water-cooled engines.
The decision to put an air-cooled engine in the new Chevrolet proved to be a disaster. Three years later, the Chevrolet division recalled all cars equipped with air-cooled engines. As Sloan persisted in his objections, the executive committee eventually abandoned the invention and discontinued production of the new engine. Plans for an air-cooled engine were shelved, much to Catlin's chagrin. Angry that his work had been undone, he resigned from the company and requested that the air-cooled engine technology be taken to other automakers.
At this time, Sloan has succeeded as GM’s eighth president. What happened next was another example of his ability to take a smart approach and try his best to appease those members of the organization who disagreed with the company's decisions but were frustrated by the facts. He knew exactly what lay ahead: "My job was to reconcile the contrast between Mr. Kettering's enthusiasm for the new idea and reality."
"Reality" refers to a sales boom that the car market was experiencing at the time. Expect. GM must focus on meeting the growing demand for water-cooled engines. This engine has been recognized by the entire industry. Two years later, Sloan completely solved this "problem." He invited Kettering to move the Dayton Electrical Engineering Laboratory to Detroit, where Kettering would become the principal director of GM's research institute. This newly established research institute is larger than his previous laboratory. There, Catlin could conduct whatever experiments he wanted with the car, without being bound by any branch or financial organization within the company. Sloan also raised Kettering's annual salary to $120,000, which is $20,000 more than Sloan's salary.
No inventor could refuse such a generous carte blanche, and Kettering was no exception. He moved his team to Detroit. The move brings Kettering closer to the GM empire.
Sloan always followed through on his word, allowing Caitlin the freedom to conduct her research. The result of this decision was two of the most successful and profitable inventions of the first half of the 20th century - ethyl gasoline and Freon liquefied gas for refrigerators. Both inventions were born and perfected at Kettering's research institute, and both brought millions of dollars in profits to GM.
Sloan maintained a policy of encouraging employee dissent, which allowed him to hear all sides of the engine battle. After Sloan won the first battle of arguments based on facts, he also tolerated the opposing parties and allowed them to promote their positions in meetings and reports. In the end, Sloan found a wise way to appease the frustrated Kettering and his research team-he mended the rift between the company and the research team and achieved final victory. Sloan, the eighth president of General Motors, always encouraged employees to express different opinions. This generosity encourages mid-level managers to express dissent even to the company's top management without fear of jeopardizing their careers.
Sloan understood that the best way to reach consensus among GM's many subsidiaries was to hold a company meeting and allow all those with different opinions to attend. He emphasized the need to bring together the many differences so that everyone can understand different ideas and understand the basic concepts of different perspectives. So he instructed the heads of each branch to meet regularly, and requested that the heads of engineering, manufacturing, and marketing departments also attend. For example, if an engineer wants to add a component to a car, he must first go to the production department to consult on the feasibility of this approach; he must also go to the marketing department to understand how the increased cost may affect the price. Sloan learned a hard lesson from past engine battles: Without communication and coordination between departments, the company would be in trouble.
Sloan would never want GM to get involved in any conflict, which would disrupt the company's smooth operations. During his tenure as GM president, he created various special committees and held regular and irregular roundtable meetings to meet various needs. Sloan stressed that these committees must have the authority to make decisions. Before implementing these decisions, the committee will listen to the different opinions of various members. As Sloan repeatedly demonstrated, it is important for company management to be able to listen to dissenting opinions. No matter how grumpy, tough or uncompromising the person who raises the objection may be, he must be allowed to express his opinion. Once, when a co-worker had a conflict with Sloan that many believed Sloan could have ignored, a GM lawyer asked, "If this employee is so annoying, why don't you fire him?" Sloan asked, "Fire him? What a ridiculous idea. He was just doing his job."