Strategy Dynamics Briefing 54: Type-1 rivalry in emerging markets

Posted by:

Markets are often in a process of emergence, when new potential customers develop, driven by product and/or price improvements offered by suppliers, as well as by political, economic, social or technological change (“PEST”) factors. This customer development process has important implications, especially for type-1 rivalry.

Figure 1 shows market development for the consumer electronic device discussed in Briefing 46; a durable product that customers upgrade or replace – with a competitor (solid lines) and without (dashed lines). When building the market ...

Continue Reading →
0

Strategy Dynamics Briefing 52: When type-1 and type-2 rivalry operate together

Posted by:

It is rare for any type of rivalry to operate entirely alone…

Examining the three main types of rivarly:

  • Type-1 rivalry to capture new potential customers could feasibly happen if the product or service is entirely new, and if any customer, once committed, would find it hard to switch. The market for enterprise-resource-planning systems (ERP) comes close to this ideal – once a substantial business has committed to using SAP it would be complex and costly to throw that out and use something else.
  • Type-2 could only ...
Continue Reading →
0

Strategy Dynamics Briefing 50: Type-1 rivalry – developing potential customers

Posted by:

The three types of rivalry from Briefing 49 can best be explained with a simplified example…Two new coffee-shops open up and operate in the same town.

The town has 5 000 customers, equally accessible to the two stores; i.e. the stores’ locations are of identical quality. Each customer normally uses a coffee store twice per week, unless value for money raises or lowers their usage. Each customer normally spends an average of $5.00 per visit, including both the coffee and snack ...

Continue Reading →
0