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Competition is important for the industry. with a fair level of competition Companies in the industry will strive to improve innovation and service. This will increase consumer satisfaction.
In the world of business competition Companies in the industry can be divided into four categories: market leader (market leader), market challenger (Market challenger). market follower and niche market (Company with similar products but more specific characteristics)
A businessman needs to understand his company’s position on this competitive map. The goal is to create the right business strategy to survive or win the competition. In this article, the author will focus on the discussion. market challenger (Market challenger).
Definition of Market Challenger
market challenger Is a company with a market share lower than the market leader But large enough to control the industry. If the market leader is company number 1, the market challengers are companies number 2 and 3.
The characteristics of the company with this competitive position are
- Terbit is a huge company in terms of revenue and sales volume.
- Mastering +- 30% market share
- able to find weaknesses from other companies and use them for the benefit of the company
- These companies generally do not hesitate to expand by acquiring weak ones.
market share (market share) is the percentage of revenue or sales of a company’s product compared to the total sales or revenue of that product in the market. This indicator is often used to determine the competitiveness of companies in an industry.
For example, the total product sales in the smartphone industry is 100,000 copies. If company A can sell 20,000 copies, it has a market share of 20%, meaning that smartphone company can be said to be a challenger. market if at least 30,000 smartphones can be sold.
In addition to market share market challenger There is still a tendency to stand or enter the industry after the market leader. But there is a good adaptation. in order to adapt well to this Market challengers generally offer products of the same quality as market leaders. recognition for their brand and maintain good relationship with customers.
Example Market Challenger
1. Delicious noodles
Indonesians are no strangers to the rivalry between Indomie and Mie Sedap in the instant noodle industry in Indonesia. Reference information from euro monitor In 2017, Wings Corp and Mie Sedap held 18.9% of the instant noodles market share in the country.
Although it seems that this company’s market share is still quite far from the aforementioned challenger category. But the authors say Mie Sedap could be included in this category as market leader Indomie controls more than 70% of the Indonesian instant noodles market.
2. Airbus
Airbus is a European aircraft manufacturer. Founded in 1970, the company offers aircraft orders from airlines around the world that were once a market competitor to industry-leading Boeing.
In addition to quality and increased sales Coupled with several years of Boeing scandals, Airbus is now a successful market leader in the passenger aircraft industry. (passenger aircraft) with a market share of approximately 62% (leeham news).
3. Grab
If asked to mention the name of an online motorcycle taxi company Most Indonesians would say Gojek or Grab in terms of market share. These two companies dominate the online motorcycle taxi market in Indonesia.
Reference information from dfd newsAs of July 2022, Grab controls 48% of the online motorcycle taxi market, while Gojek has 52%. compete because it only entered the Indonesian market in 2014 while Gojek has been in the country since 2010.
market challenger strategy
As it attempts to dominate the market, companies that fall into the category market challenger Often use aggressive marketing strategies. Here are some strategies commonly used by companies in this category:
1. Full Face Attack
in this single strategy market challenger will try to imitate the strategy implemented by market leaderStarting from product quality, price, to advertising, discounts, it will try to match. For example, if the company is an industry leader. e-commerce Run a free shipping promotion, then the challenger company will use the same strategy.
2. Indirect attacks
Market leaders typically have more resources than challengers. Therefore, sometimes a full frontal attack strategy is considered less effective. On the other hand, a challenger may use a strategy that targets the market leader’s weaknesses. (Indirect attacks) or offer product solutions that leading companies haven’t tried yet.
For example, Airbus successfully developed a fuel-efficient aircraft with the A320neo in 2014. This aircraft was successful in the market because fuel is the largest cost component in the aviation industry and Boeing has yet to attempt a similar product.
3. Siege attack
Surrounding attacks are a strategy that combines both frontal and indirect attacks. Also known as challenger companies that try to pressure leaders based on their strengths and weaknesses.
For example, HP acquired Compaq in 2002 to challenge Dell.
4. Avoid Attacks
It is not often that the company nominee Difficult to face the leader directly In such a case nominee Can be used to bypass attacks by finding alternative strategies to enter the industry, such as opening new markets in different places.
For example, the Noice audio application, you can say that Spotify is currently an audio player application. The largest (music and podcast) channel in Indonesia. Instead of challenging Spotify with the same audio content, Noice continues to offer podcasts but not with music. But it offers audiobooks and radio.
Additionally, Noice has a live broadcast feature integrated into the main application (unlike Spotify separately) and developed special podcast classes to increase content quality and creator community.
5. Guerrilla Warfare
As the name implies, guerrilla warfare, this type of marketing tactic tends to move “underground” based on small successes that may not directly confront the leader, but gradually make effective moves.
This strategy is generally used by challenger companies who want to challenge market leaders with a small budget but with long-term efficiency. Mie Sedap uses this strategy to enter the instant noodle market in Indonesia.
When it was first released, Wings Group president Edi Katuari used the company’s general distribution network to first distribute this new product in villages and small towns. Major cities and supermarkets
Difference Between Market Challenger and Market Follower
In contrast to market competitors Companies that are in the market follower category don’t try to challenge the leaders and are quite satisfied with their current position in the industry. These types of companies tend to mimic marketing tactics performed by leaders and followers. And high profits due to the relatively low cost of marketing.
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