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Abstract
The performance of many businesses nowadays depends on their competitive advantage. Businesses can achieve competitive advantage through its strategies by identifying their roles and that of their rivals.
The roles played by businesses in an industry are classified into three groups namely: market leader, market challenger, market follower, and market “nicher”. The paper explores different roles played by top female handbag designers, that is, Louis Vuitton, Coach and Michael Kors to brand and position their products in the fashion industry.
Introduction
In the current competitive market, business success not only depended on consumer behavior, but also the number of competitors in the market. They must continuously evaluate their products, prices, distributional channels and promotional activities with their main rivals in order to ascertain their strengths and weaknesses.
Identification of the rivals, their moves and trends helps in the establishment of suitable strategies to compete in the market (Cuellar-Healey, 2013, p. 4). According to Kriemadis and Terzoudis (2007, p. 30), appropriate strategies can help businesses to maximize great opportunities to enhance sales and attain sustainable competitive advantage using the available resources.
A business can only gain further ground over rivals through its strategies by identifying its roles and that of its rivals. The roles played by businesses in an industry can be gainfully categorized into: market leader, market contender/challenger, market follower, and market “nicher”. The market leader is a company with the leading market share.
A company can be dominant in term of prices, product innovation, exposure, and promotional budget. Market leader always strives to be on top of the industry by expanding and defending its current market share (Kotler & Keller, 2012, p. 98).
The market challenger is a firm that trails the market leader and always strives to overtake it by expanding its market share. The challenger normally expands its market share by attacking the market leader and other rivals in the market. Market follower is a company that opts to follow the leader instead of attacking because of the fear of losing than gaining.
The market “nicher” is a firm that opts to lead in a small market/market “niche” instead of following the leader. Market “nicher” normally does this to avoid attracting attention of the larger firms. The paper will explore different roles played by top female handbag designers, that is, Louis Vuitton, Coach and Michael Kors to brand and position their products in the fashion industry.
Coach plays the role of a market leader in terms of sales and market share. The company’s sale is estimated at around $700billion per annum. Its luxury products are priced at numerous levels to increase access into new markets. The company mainly focuses on younger women who are the majority consumers. In addition, the company outsources its manufacturing and employs top designers that are responsible for designing various fashions to meet their customers demand, hence creating competitive advantage in the industry.
Louis Vuitton is the market challenger. In 2012, the company’s sales exceeded €28 billion, excluding acquisitions and currency movements. The company is present in over 130 locations across the globe.
The company uses numerous strategies to increase its market share and get to the top. The main strategies used include: global expansion, incorporation of new innovations, product diversification and appealing to the local consumers through aggressive promotion and store locations. Last but not least, Michael Kors is the market “nicher”. The company only targets affluent consumers and its stores are located in the most prestigious cities in the world.
Conclusion
The performance of many businesses nowadays depends on their competitive advantage. Businesses can achieve competitive advantage through its strategies by identifying their roles and that of their rivals. Among the three female handbag designers, Coach plays the role of a market leader, Louis Vuitton a market challenger and Michael Kors as a market “nicher”.
References
Cuellar-Healey, S. (2013).Competitor Analysis. Marketing Module, 4(5), 1-17.
Kotler, P., & Keller, K. (2012). Marketing Management. Harlow: Pearson Education, Inc.
Kriemadis, T., & Terzoudis, C. (2007) Strategic Marketing Planning in the Sport Sector. Sport Management International Journal, 3(1), 27-45.
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