Some specific attack strategies


The challenger must go beyond the broad strategies and develop more specific strategies:

A. Price discount: The challenger can offer a comparable product at a lower price. This is the strategy of discount retailers. Three conditions must be fulfilled. First, the challenger must convince buyers that its product and service are comparable to the Leader’s. Second, Buyers must be price sensitive. Third, the market leader must refuse to cut its price in spite of the competitor’s attack.

B. Lower price goods: The challenger can offer an average or lower quality product at a much lower price. Little Debbie Snack Cakes were priced lower than Drake’s and outsold Drake’s by 20 to 1. Firms that establish themselves through a lower-price strategy, however, can be attacked by firms whose prices are even lower.

C. Value-priced goods and services: In recent years companies ranging from retailers such as Target and airlines such as Southwest are combining low prices and high quality to snag market share from market leaders. In United Kingdom, premium retailers like Boots and Sainsbury are now scrambling to meet intensifying price and quality competition from ASDA and Tesco.

D. Prestige goods: A market challenger can launch a higher-quality product and charge a higher price than the leader. Mercedes gained on Cadillac in the U.S. market by offering a car of higher quality at a higher price.

E. Product proliferation: The challenger can attack the leader by launching a larger product variety, thus giving buyers more choice. Baskin-Robbins achieved its growth in the ice-cream business by promoting 31 more flavors than its larger competitors.

F. Product innovations: The challenger can pursue product innovation. 3M typically enters new markets by introducing a product improvement or breakthrough.

G. Improved services: The challenger can offer new or better services to customers. Avis’s famous attack on Hertz, “We’re only second. We try harder,� was based on promising and delivering cleaner cars and faster service than Hertz.

H. Distribution-Innovation: A challenger might develop a new channel of distribution. Avon became a major cosmetics company by perfecting door-to-door selling instead of battling other cosmetic firms in conventional stores.

I. Manufacturing- Cost reduction: The challenger might achieve lower manufacturing costs than its competitors through more efficient purchasing, lower labor costs, and more modern production equipment.

J. Intensive advertising promotion: Some challengers attack the leader by increasing expenditures on advertising and promotion. Substantial promotional spending, however, is usually not a sensible strategy unless the challenger’s product or advertising message is superior.

A challenger’s success depends on combining several strategies to improve its position over time.

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