Competitive Positions

Firms competing in a given target market, at any point in time, differ in their objectives and resources. Some firms are large, others small. Some have many resources, others are strapped for funds. Some are mature and established, others new and fresh. Some strive for rapid market share growth, others for long-term profits. And the firms occupy different competitive positions in the target market.

We now examine competitive strategies based on the roles firms play in the target market—leader, challenger, follower, or nicher. Suppose that an industry contains the firms shown in # Figure 18.3. Forty percent of the market is in the hands of, the market leader, the firm with the largest market share. Another 30 percent is in the hands of market challengers, runner-up firms that are fighting hard to increase their market share. Another 20 percent is in the hands of market followers, other runner-up firms that want to hold their share without rocking the boat. The remaining 10 percent is in the hands of market nichers, firms that serve small segments not being pursued by other firms.

Each market position calls for a different competitive strategy. For example, the market leader wants to expand total demand and protect or expand its share. Market nichers seek market segments that are big enough to be profitable but small enough to be of little interest to major competitors.

Market eader

Market challengers

Market followers

Market nichers

Market challengers

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