Once the company has identified its competitors it would now seek to find out what exactly the competitors seek to gain from the market and what their specific objectives may be. Each company usually has a mixture of objectives in differing priorities and thus it would be essential to discover how much priority a competitor may place on growth in market share, increasing profits, service leadership, and advancement in technology. A competitor’s promotion strategy especially its advertisements could show a lot about what the company believes in and its objectives. It could reveal some of its positioning, new pricing strategies, segmentation, research and branding strategies. The choice of new strategies could also expose problems with previous positioning strategies, research or a particular strategic direction. It could also tell the company if they have identified a new source of competitive advantage within the industry.
After a careful analysis of what competitors are looking to achieve on the market, the company will design competitive marketing strategies that will make its product or service more attractive than its competitors on the market. Every company is unique and thus each company would have to identify which strategy would be best for it to adopt taking into consideration its resources, objectives and the opportunities and threats in the environment.
There are three common strategies that a company uses to position its product or service against that of its competitors. The first is the overall cost leadership strategy, where the company strives to attain the lowest price of its product on the market in comparison to its competitors. It achieves this by looking for cheaper ways of production and distribution. In production the company would seek to look for cheaper raw materials, labour, machinery production methods and so on. In terms of distribution, the company may decide to use shorter distribution channels, locate cheaper methods of transportation and so on.
Another method is differentiation, which involves the company designing a product that give the customer more value as compared to competitors for a lower price or a price that matches that increased value. The third positioning strategy is the focus strategy which seeks to serve a few market segments instead of the whole with a particular product which will satisfy their specific needs.
With these strategies in mind and with the aid of the competitive analysis a company would be likely to perform well and achieve its set objectives.