And the two sources of competition perhaps most surprising (and terrifying) for companies because of the threat they pose are new entrants and substitutes.The classic example of the first is a manufacturer who sells to retailers but decides to go around and sell directly to end customers and in the second case, some buyers can integrate backward, such as buying a company that supplies the brands or services needed for production. But competition could also evolve from suppliers to your industry and buyers in your industry.At the two levels of a market noted above: competitors vying for your customers right now.Porter says companies face competition from five sources: Who Is Your Competition?Ī classic viewpoint on competition comes from Michael Porter, who wrote the seminal book on the topic: Competitive Strategy, in 1985. As a result, they get blindsided by the competition. Many companies focus on those two narrow, limited ways to define a market. A more specific market definition is at the level of product category, industry, or vertical.The simplest definition of a market is your current and potential customers and the competitors vying for those customers.So there are various ways to think about it, including these two common, lower-level approaches: Now, that's a bit tricky to answer because a market is not tangible: You can't touch, smell, taste, see, or hear a market-it's a concept. Those questions about marketing strategy bring into focus a central issue: You need a deep understanding of your market. How does my company get a differential advantage over the competition now and in the future?.What types of growth strategies exist right now and might in future?.Where are future competitors coming from?.So, when we think about that higher level, what questions arise that are the domain of marketing strategy? Instead, marketing strategy comes into play at the level of the entire market-and even potential markets. Nor is a strategy focused on the level of market descriptors, such as SIC codes or Industry verticals. Let's ground all that in terms of the common ways we think about marketing: Strategy is not focused on personas or specific people-say, a customer. Third, marketing strategy aims to provide a sustainable, differential advantage over the competition. You do need a short-term viewpoint, but a strategy's long-term view is what sustains organizations over time. That clashes with the short-term attitudes that dominate marketing. Second, the perspective of marketing strategy is long-term. And although the mindset of strategy tends to be analytic, strategy escapes analytic boundaries and ventures beyond. Strategy asks different, larger questions. As such, it does not focus on tactics-such as lead generation, content marketing, social media, and the like. So let's cover some basic ideas that separate marketing strategy from other aspects of marketing.įirst, the focus of a marketing strategy is broad-it takes a helicopter view of the marketing landscape. "What is the definition of marketing strategy?" is a common question among marketing professionals and others in the business world.
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