How to attack the Leader

Presented By:

Anshul Kumar Singh Krishna Kumar Balaraman Vinod Kumar Ellamaraju Vishesh Kumar Agarwal

MS12A011 MS13D013 MS12A102 MS12A103

Who is a market leader?

The dominant player with a major hold on the market.
Largest market share Highest profitability margin

Several characteristics of Market Leaders:

A. Customer-Focused : Customer is the most important element to achieving success B. Clear Vision : Leaders have a clear vision of their direction as well as an effective
road map (contd..)

Continued..
C. Flexibility: When theres an inevitable need to change, the market leaders are nimble
enough to make necessary adjustments with as little disruption as possible

D. Investing in Employees : Market leaders not only focussed on recruiting the best and
brightest employees available, they also invest in their continued development

How to Attack the Leader

Key points to consider: Understand customer needs deeply by staying close with customers Build your own core-competency and develop your product over it in order to gain the competitive advantage Look for disruptive ideas - new technology, create new desire etc. Know your strengths and weaknesses Must have at least one thing that the market leader does not have and that customers want Analyse leaders strengths and weaknesses. Analyse the depth and reasons for consumer loyalty towards leader Do not fight head-on with a market leader unless you have at least three times its resources Have long term goal on mind. Be ready to accept small losses in order to win the market in long run Be the opposite to the leader

How to Attack the Leader

Factors that may affect the attack:
Economic conditions, legal aspects, geographical and so on Consumers culture and loyalty towards the leader maybe for more reasons than obvious like sentimental reasons The timing of attack - which is best time? and so on..

How to Attack the Leader - Strategy

1. Begin with a quantifiable objective, e.g. to attain x% of market share by year 2014. Be clear on the objective and basis of attack like getting the market share in terms of Volume or in terms of Value. 2. Understand the leader well - Strengths and weaknesses - market segments, positioning, pricing, product line and so on. 3. Choose a plan of attack (attack strategy)

How to Attack the Leader - Strategy

Attacking Strategies:

a) b) c) d) e) f)

Frontal Attack Flank Attack Encirclement Attack Bypass Attack (Leap Frog Strategy) Guerrilla Warfare Commitment Strategy

How to Attack the Leader - Strategy

Fronts of Attack: Price / Quality - lower price for lower quality Price discounts High Premium - Quality / Prestige Increased scope and product spread Innovation - model, process, products Service differentiator Supply Chain Management - Inbound, Outbound, Suppliers, Buyer reach Manufacturing - Advantage of Scale Marketing and Sales - Increased advertisement and customer acquisition mode Geographical consolidation Channel upgradation - Alternate channels and channel compensation

Response of Market Leader on Attack

Expand Total Market This strategy involves having more number of transactions
by either having more number of users or increasing the frequency of use

Larger number of users can be achieved by segmenting the market further

Expand Market Share Get more market share and increase profit. The firm needs to check that cost of buying market share should be less than the benefit

Response of Market Leader on Attack

(Contd.)
Defend Market Share Market leader needs to respond to the attack with various defensive strategies:
Position Defence - Firm uses its position for a while but it doesnt help to restrain competition for long Mobile Defence - By market broadening and diversification Flanking Attack - Secondary markets, in which the firm is weaker, should be the focus area Contracting Defence - Firm withdraws from the weaker segment and directs all its resource to its strong hold Pre-emptive Defence - Firm attacks the enemies first before it being attacked in the area where it expects competitors Counter-Offensive Defence - Respond by attacking the competitor firms weakness

Fairever

vs

Fair & Lovely

Fair & Lovely was launched in 1978 and maintained market share of 90% till 1988 Fairever a late entrant launched in 1988 and gained 1.3% market share in first year and 15% in second year Fairever- A fairness cream with saffron and milk Focus on achievement rather than fairness in advertisements Excellent Packaging

Response
HLL gave 50% extra volume to counter Fairever Fairever didnt follow the competitor, and it maintained itself as a premium fairness cream In 2005, Fairever went natural The brand also launched a premium Fairness cream sub-branded Manthra aimed at the Upmarket customers

Present Scenario
Fairever is currently at a market share of around 3.5% At the same time the share of Market leader Fair & Lovely has reduced to 46.9% with new entrants like LOreal Garnier taking the share away and having 7.3% of the market This example shows how the market leader can be repeatedly attacked to have a lesser and lesser market share

Thank You