Toyota Competitive Strategies

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Competitive Strategy 
Asia-Pacific Marketing Federation
Certified Professional Marketer
Copyright
Marketing Institute of Singapore
 
 
 
 
Outline 
* Introduction
* Sustainable competitive advantage (SCA)
* Sources of SCA
* Strategies for
* Market Leaders
* Challengers
* Followers, and
* Nichers
 
 
 
 
Introduction 
* Having a competitive advantage is necessary for a firm to compete in the market * But what is more important is whether the competitiveadvantage is sustainable * A firm must identify its position relative to the competition in the market * By knowing if it is a leader, challenger, follower or nicher, it can adopt appropriate strategies to compete  

 
 
 
Sustainable Competitive Advantage 
* A good strategist seeks not only to “win the hill, but hold on to it.”  Subash Jain * Sustaining competitive advantage requires erecting barriers against the competition * Aakers suggested looking at the following:

* How you compete
* Basis of competition
* Where you compete
* Whom you are competing against
 
 
 
 
Examples of SCA 
* For many years, Singapore Airlines were riding on its SCA of having the best in-flight service * As more airlines improved their service and  narrowed the gap, SIA sought othercompetitive advantages among which are * The most modern fleet

* Outstanding Service on the Ground
* A super entertainment system in its cabins
* Comfort in its First Class cabins at an unparallel level * Discuss whether the later initiatives had been sustainable  
 
 
 
Sun Tze’s defensive strategy 
“Do not assume the enemy will not come
  but be prepared for his coming…
  Do not presume he will not attack,
  but instead make your own position unassailable.”
 
 
 
 
Sun Tze’s Offensive Strategies 
* Overt-offensive strategy
* To knock out a business rival so as to take over his company * To knock out a competing product so as to take over its market share * Covert-offensive strategy
* Keep as low a profile as possible while making offensive moves  
 
 
 
Strategies for Market Leaders 
Market Leader’s objectives:
* Expand the total market by
* Finding new users
* Creating new uses, and
* Encouraging more usage
* Protect its current market share by
* Adopting defense strategies (see following slides)
* Increase its market share
* Note the relationship between market share and profitability  
 
 
 
Which strategy to use? 
Depends on your answer to the following:
* Is it worth fighting?
* Are you strong enough to fight?
* How strong is your defense?
* Do you have any choice but to fight?
 
 
 
 
Defense Strategy 
* A market leader should generally adopt a defense strategy * Six commonly used defense strategies
* Position Defense
* Mobile Defense
* Flanking Defense
* Contraction Defense
* Pre-emptive Defense
* Counter-Offensive Defense
 
 
 
 
Defense Strategy (cont’d) 
Position Defense
* Least successful of the defense strategies
* “A company attempting a fortress defense will find itself retreating from line after line of fortification into shrinking product markets.”  Saunders (1987) * e.g. Mercedes was using a position defense strategy untilToyota launched a frontal attack with its Lexus.    

 
 
 
Defense Strategy (cont’d) 
Mobile Defense
* By market broadening and diversification
* For marketing broadening, there is a need to
* Redefine the business (principle of objective), and
* Focus efforts on the competition (the principle of mass) * e.g. Legend Holdings, the top China PC maker Legend has announced a joint venture with AOL to broaden its business to provide Internet services in the mainland  

 
 
 
Defense Strategy (cont’d) 
Flanking Defense:...
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