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Market follower Strategies
Transcript of Market follower Strategies
Theodore Levitt in his article, “Innovative Imitation”argued "that a product imitation strategy might be just as profitable as a product innovation strategy"
Imitades the products from the Market Leader and made them to their own. By using own package design, advertising, price and other different elements.
The market leader does not addent the imitator, as long as he is not going forward in an aggressive way. In certain way he also helps him, while they discharge him of the monopoly reproach.
This strategy copied the whole product, but it is an illegal acting. Often used by the black market.
Mainly using of reproduction with minor variations. Companies want to profit as a copycat from the investments of the market leader.
By using this strategy the company takes a similar product like the Market Leader, but makes it better. This strategy can be used to overtake the front-runner.
Of course the newcomer has to find out the patent situation to clarify the possibilities of following before it used the right one. Anotherwise the legal foundation can put paid to the market entering plans.
Instead of attacking the market leader, for the newcomer everything has done nicely for himself there.
In addition, the newcomer benefet from the earlier mistakes of its competitor(s).
Because he don`t have to put high investments in the areas of the product research and development, the front-runner has done already the advertisement for the necessity of the product. The product already entered the market, costs for market development are not necessary.
owns the colour magenta!
They had to change it, because of danger of confusion
Counterattacks can take many forms. In a counteroffensive, the leader can meet the attacker frontally or hit its flank or launch a pincer movement. An effective counterattack is to invade the attacker’s main territory so that it will have to pull back to defend the territory.
If the follower attacks a market leader with the same quality offerings and at the same price, it might have to face severe attacks from the market leader. So, unless the follower firm has some strong point in its armor, it will not dare attack the marketleader.
It’s imporant to realize your limitations if you’re a follower. If you cant get to No.2 or at the most No. 3, then it’s better to exit the business and focus on your core competencies rather than play a losing game.
Market follower: A company or product which is not one of the main ones in a particular market and does not have a large share of the market.
Very good examples are Korean auto industries, like Hyundai and KIA.
Hyundai Equus (2009) vs KIA Magentis (2012)
Hyundai Tuscon (2006) VS KIA Sorento (2009)
As market follower is called a company which tries to copy the success of the market leader.
Mostly the adapter is looking for own markets to around a direct confrontation with the market leader. Therefore adopter has the possibility to become with the time a challenger of the market leader.