Marketing Competition by Sun Tzu

So in war, then, let a victory be your main objective, not the conduct of lengthy and costly campaigns.

As a rule of war, if our forces outnumber the enemy’s forces by ten to one, surround him; if by five to one,
attack him; if by two to one, divide his army in two. If equally matched, offer battle; if slightly inferior in
numbers, avoid his main force; if quite unequal in every way, elude him.

In the practice of the art of war, it is best to take the enemy’s country whole and intact. To shatter and
destroy his country is inferior to this way. So, too, it is better to capture an army intact than to destroy it,
better to capture a regiment, a detachment or a company intact than to destroy them.

Thus it is that in war the victorious strategist seeks battle after the victory has been won, whereas he who
is destined to defeat first fights and afterwards looks for victory in the midst of the fight.

When he uses his combined force, his soldiers become like rolling logs or stones. For it is the nature of
a log or stone to remain motionless on level ground, and to move when on a slope; if four-cornered, to come
to a standstill, but if round-shaped, to go rolling down. Thus the military force developed by good soldiers
is like the momentum of a round stone rolling down a mountain thousands of feet high.

Let your rapidity be that of the wind, your appearance imposing as a great forest.

To make yourself invulnerable to defeat lies in your own hands, but the enemy himself must provide you
with the opportunity to defeat him.

If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven
and know Earth, you may make your victory complete.

Walk in the path defined by rule, and accommodate yourself to the enemy until you can fight a decisive
battle. At first, then, exhibit the coyness of a maiden, until the enemy gives you an opening; afterwards
emulate the rapidity of a running hare, and your enemy will find it too late to oppose you.

Do not move unless you see an advantage; do not use your troops unless there is something to be gained;
do not fight unless the contested position is critical. Copyright © 2003 – Robert Cantrell

www.artofwarsuntzu.com

SWOT Analysis

SWOT Analysis is an effective method of identifying your internal and external environment summarised as your strengths, opportunities, weaknesses and threats and is key to business planning success.

Let's explore what makes the analysis of Strengths, Weaknesses, Opportunities and Threats so significant.

Four areas of analysis

Your SWOT analysis will help you focus and build on your strengths, minimise weaknesses, maximise your opportunities and mitigate any weaknesses and is the foundation of any business plan or marketing plan.

• Strengths - internal analysis
  
• Weaknesses - internal analysis
  
• Opportunities - external analysis
  
• Threats - external analysis
  

Now, we will analyze some aspects of that situation. We are looking for two key things:

• Opportunities:These are developments in the external marketing environment which will lead to new market segments or which will enhance existing ones. A change in consumer attitudes,a new law that makes a product required, a group in the population that is entering a new stage -- any of these could be major opportunities.


• Threats: These are developments which threaten to disrupt the status quo in some way. A new competitor, especially an aggressive one, will alter industry dynamics dramatically. A decline in interest for a major product category (e.g. cigarette,beer) would be another threat. A rise in interest rates can put a damper on the housing industry.

Above all, remember that opportunities and threats exist in the external environment and are completely independent of whatever firm you are studying. This is essential to understand, because any of several firms could pursue the same opportunity! A thorough analysis would consider likely competitor actions and recognize that others could get a share of the new segment.

Once we have identified the key opportunities and threats, we can determine which opportunities to exploit and how we can avoid or overcome threats. All of this happens after we are clear on what is happening in the environment.

Strengths & Weaknesses

A realistic, objective analysis of our subject company yields two key things. It gives us a sense of what strengths we can build on and what weaknesses we can overcome or avoid.

Weaknesses are usually just the opposite of strengths! A horrible brand reputation would be an example. While it is tempting to be charitable or full of worship when analyzing a firm, it is essential to get a realistic sense of where their problems lie.

Once this analysis is complete you will have to put various actions plans together to focus on what will make your business a success in the future.
Nowadays marketers often using OT (Opportunities and Threats) first before SW (Strengths and Weaknesses).

Competition Based Pricing

Competition Based Pricing
Competition is a way of life. Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. Get a feel for the pricing strategy your competitors are using. That way you can determine if your prices are in line with competitors in your market area and if they are in line with industry averages.

There are 3 types of pricing :

a) Destroyer Pricing

You should be carefully if want to use this strategy. Company use this strategy as an attempt to eliminate competition by lowering prices to an extent where competitors cannot compete and consequently, they go out of business. This is what you find with all competition based pricing strategies.

To do this company should make a research to know how competitive they can be with their prices compare to their competitors. If competitors can follow your price cuts even more they do it lower than yourself,you may go out of business.

b) Price Matching

Many companies feel that lowering prices to be more competitive can make a disaster for them and so instead, they settle for a price that is close to their competitors (just follow the leader if your company is not the leader in the field or you can set your own price if your company is dominant in the field)

Any price movements made by competitors is then followed by yourself: but how long that you can compensate for any reductions if they keep lowering their price.

You should make your business more dominant within its market by offering good service or product that is unique or popular (through branding). As a result, you may have the power to set the price in which your competitors will attempt to follow.

c) Price Bidding

Price bidding is a strategy most common with manufacturing, building and construction services. For example, in the government project all the consulted businesses will send a representative to bid for the work as if it was an auction.
If this was considered a big job (likely to generate high revenue), then some businesses would consider cutting their prices as it may account for a large proportion of their annual revenue.