Professor George BurtDr Tom ForbesDr John W SandersLecture 3: Market Based View (MBV) and Competitive EnvironmentPart 3Strategy for Sustainable Success (BUAP012)Strategy and Competitive Advantage (BUSP010)International Strategy (IBUP010)• A key challenge in industry analysis is defining therelevant industry• But what are industries?• What about geographical boundaries?• Always a matter of judgement that depends on thepurposes and context of the analysisDefining industry and marketboundaries •Market segmentation analysis: demand-sidedisaggregation •Strategic group analysis: supply-sidedisaggregation Sub-Market Level Analysis• How is the market segmented?• How could it be segmented (in ways thatare value-adding for you)?Market Segmentation: Key QuestionsMarket Segmentation• “Market segmentation is the process of splittingcustomers, or potential customers, within amarket into different groups within whichcustomers have the same or similarrequirements”McDonald & Dunbar, 1995Some Criteria for Market Segmentation Type of FactorConsumer MarketsIndustrial/OrganisationalMarketsCharacteristics ofPeople/organisationsAge, sex, raceIncomeFamily sizeLife-cycle stageIndustryLocationsizeTechnologyLocationProfitabilityLifestyleManagement Purchase/UseSituation(buyer behaviour)Size of purchaseBrand LoyaltyPurpose of usePurchasing BehaviourImportance of PurchaseChoice criteriaApplicationImportance of purchaseVolumeFrequency of purchasePurchasing procedureChoice criteriaDistribution channel Needs/preferencesPriceSupply supportBrandPerformanceQualityQuality Market Segmentation (an example)Customer characteristic A [lifestyle]Customer characteristic B [age]Where would you position your case organisation’s productsand services?Where would you position the competitors products?Implications?Lifestyle A Lifestyle BAge AAge BHow is this market segmented?
