How to Choose the Right Competitive Strategy

Is your business a market leader, challenger, follower, or niche company?

Note: This is the third article in a series on competitive strategy from FrogDog. To begin from the beginning, click here.

After you’ve developed a strong competitive analysis, you’re ready to assess which competitive strategy makes the most sense for your company. Choosing a competitive strategy is critical for marketing success—so spending the time needed to pick the right one is a smart decision.

If you’ve read our article on the three primary competitive strategies and still aren’t sure about which to use, you can analyze your options further by considering where your company fits in relation to its competition:

Market Leader

This is the leader of the brand’s market. Market leaders expand their market share by developing new customers, more customers, and more usage. Often, they do so through continuous innovation.

• Expand Total Market: This provides the market leader the most gains. This can be done by attracting new customers, identifying new uses for a product, or inducing customers to use more of the product. For example, P&G encourages customers to wash their hair twice for the shampoo to be most effective.
• Expand Share: This is done through continuous innovation. Apple expanded its market share by combining its iPod with a smart phone to capture the smart phone market.

Market Challenger

Market challengers want to aggressively steal market share from the market leader. They focus on finding or creating differentiators to exploit opportunities. Pepsi is a good example of a challenger brand. It ran a series of taste-test campaigns wherein people rated its cola taste higher than Coke’s.

• Frontal Attack: This is where the challenger measures everything against its competitors (price, distribution, and product). Generally, the company or brand with the largest resources wins.
• Flank Attack: This is where the challenge looks to see the gaps that the market leader might be missing.
• Blitz Attack: This is where the challenger “blitzes” attacks from different directions at the same time. This would require a lot of resources and often is done if you think that you can break the will of your competitor.
• Bypass Attack: In this approach, the challenger bypasses the leader and attacks easier markets. Strategies include going into new geographical areas.
• Guerilla Attack: These are small, intermittent attacks to harass the market leader.

The market challenger uses a variety of tactics in its attack including price discounts, cheaper goods, prestige goods, product innovation, variety in products (a larger range), and improved services. The challenger often needs to use a multitude of these tactics at different times to increase its market share.

Market Follower

The market follower effectively copies the market leader while positioning its brand slightly differently.

• Clone: This is where a follower imitates the market leader in advertising, products, and distribution.
• Imitate: An imitator copies some things from the leader but maintains an element of differentiation. Store brands are good examples (e.g., Kroger cola, butter, and so forth). Supermarket chains have developed acceptable brand alternatives at lower price points.
• Adapt: To be an adapter, your company would slightly change and improve its products and predominantly sell them in a different market.

Market Niche

Companies in market niches intend to dominate specific segments. These are generally smaller companies that can’t effectively compete against market leaders for a variety of reasons, but can reach their business goals through focusing on differentiating factors that speak to highly specific and targeted consumer groups.

Need help refining your competitive strategy? Contact FrogDog.

This article is the last in a series by FrogDog about competitive strategy. To begin from the beginning, click here. If you would like to read our white paper on competitive strategy, you can download it here.

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