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The firm is a follower in the industry, which waits for its competitors to launch their new products or services then counter them with its. In this case, advertising and marketing play a great role in suing customers what to purchases.
To be a first mover, in this case, may have either advantages or disadvantages. The advantages will come about if the firm has superior information on the inputs material and that it has a wide geographical coverage of the market share with its already existing products. This will make the firm have the best price for the product or services such that the followers will take time to come up will a similar one. If the firm is large enough in terms of its capital base and technology then being a first mover will have less negative impacts (Lieberman and Montgomery 44).
Accordingly, the firm may be disadvantageous to be the first mover if it doesn’t have a wide market share in the region. This leads to followers adopting a similar product or service and providing it better and more efficiently. The stronger followers can adopt a stronger marketing and advertising strategy since they will be free ridding in this case. Thus, it will be prudent for the firm to have full information about the market, customers, timing, and potential competitors. This will enable them to know the expected revenue and economies of scale.
Looking at the three competitors, their technology and resource are different thus, bringing efficiency as a subject. Our firm has the strength of advanced technology, customer confidence, a good proportion of the market share, and wider geographical coverage. While Competitor one has the advantage of cheap raw materials and wider geographical coverage, Competitor two has advanced technology and Competitor three has the advantage of advanced technology and good marketing strategy.
The main weaknesses faced by the firm are the availability of cheaper raw materials, increased taxation, and the need to increase the financial base. Similarly, the other three competitors face the same with Competitor one facing the challenge of advanced technology. It is this that makes our firm emphasis on high-quality products and services that meets consumer needs at an affordable price. More so, the advanced technology has enabled the firm to operate at favorable economies of scale by producing more at a cheaper price. Differentiation of the products has also led to wider geographical coverage at a cheaper cost due to mass transportation.
Despite the opportunities, the firm faces the threats of increased competition and government regulations. To conquer the threat of competition the firm intends to increase its advertisements and adopts a pricing strategy. While one of the increased regulations will be handled by a memorandum between the industry and the government to ensure that the conditions set are favorable for the growth of both industry and economy (Lieberman and Montgomery 48).
To counter the marketing strategy of a leading competitor, our firm has to put into consideration the motive behind marketing. That is, is it to increase sales by affecting prices and geographic coverage or to increase customers by improving services and efficiency? The first way to counter a leading competitor is to increase advertisements on the already existing products of the firm and the newly invented ones.
This will be accompanied by the effects of free riding where our firm will draw upon either the failures of the leading competitors or their strengths. There will also be a need to look at the size of the other and its potential revenue in the marketing strategy at hand (Ries and Trout 46).
The second way is shifting our strategy to the technology and needs of the consumers. Being a follower in the market enables our firm to look at their strategy and consumer satisfaction. It is this that will enable us to come with a product or service that meets customer needs at a cheaper price more efficiently. It gives our firm the advantage of a reduction in the cost of market search and creation. The third way is to look at the consumer purchasing behavior, whether they are loyal to their brands or buy out of adverts and displays. This will enable the firm to adopt appropriate ways of retaining already existing customers and wooing others to purchase its products and services (Ries and Trout 58).
Also, if the leader strategizes in reducing the prices then, our firm will adopt a similar leading to an equilibrium price between the two firms. At this point, the only consumer will benefit since profits to the firms will be normal. Our firm will remain with its royal customers and retain the market share. Thus, countering the leader competitor will eventually be a game where one only needs to know the tricks and theory of their movements.
Lieberman, Marvin and Montgomery, David. First-mover advantages. Strategic Management Journal, 9(1988):41-58.
Ries, Al and Trout, Jack. Marketing warfare. New York: McGraw-Hill. 1986. Print.