Bhupesh Shrestha

EMBA Fall 2020

1. You have been recently appointed as a marketing strategist of Nepal Motors Pvt. Ltd.,
which is an exclusive distributor of an entry to the mid-segment car brand. Explain how
you will identify and analyze the competitors for your business. Use all possible analytical
tools and models to evaluate your competitors. Also, explain briefly why competitors’
analysis is vital to marketing strategy formulation.

Nepal Motors Pvt. Ltd. is an exclusive distributor of an entry to the mid-segment car brand in
Nepal. Clearly, the market segment is concentrated only on the entry to middle-size cars. It
would be difficult to identify various types of competitors – direct competitors, potential
competitors, and indirect competitors until we understand the customers and are clear about
our own strategy. Therefore, before identifying the competitors and formulating strategies, let
us analyze the customers and segment of the customer which the firm is targeting for.

Product Assumption (borrowed from Maruti Suzuki- Celerio)

Engine Type: 1.0K10C with idle start stop

Engine Capacity 998 CC
Max Power PS 67ps @ 5500rpm
No. of cylinder 3
Fuel Efficiency (km/lt) 26.68
Fuel Tank Capacity (ltrs) 32
Kerb weight (kg) 825
Seating capacity 5
Boot Space 313 Ltr
Price Starting NRs. 25,99,000

Strength of the product

• Affordable price
• Low operation cost, high mileage
• Enough ground clearance for the cities with lots of potholes and humps.
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• Low maintenance cost

Weakness of the Product

• Not very luxurious

• Lacks many safety features
• Service centers

Customer Analysis and Segmentation

Though Nepal Motors Pvt. Ltd. is a distributor, being the market segment concentrated in
cities, it intended to establish a showroom itself.

The customers for the firm are expected to be middle-income family type people at the age of
around 35-50 years who wanted to be upgraded to four-wheeler vehicles from motorcycles.
Further, geographically the customers are city-centric, usually doing home-office travel with
occasionally going short distance outings. Since both marketed vehicles are targeted at middle-
income people, the strategy of the company will be to make the vehicle accessible on an
installment basis that too at an affordable level even though increasing the number of
installments. Further, arrangements for the buyback of the vehicle the customer pre-own will
be made.

But in this market segment, Nepal Motor Pvt. Ltd. is not only the player. There are many other
players which could affect the operation and positioning of the firm in the market who directly
or indirectly compete on revenue collection, and market share with the firms and there are even
some potential competitors which may be threats to us.

There are various managerial tools that will help figure out various types of competitors so that
we can take various strategies to take the competitive advantages. The various analytical tools
and models that we have for the identification of competitors are:

a) Customer-Based Approach:
Let us first analyze the competitors first from the Customer based approach. Customer
based approach is one of the simplest forms of competitor analysis whose main basis of

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identification of competitor is based on a single question “what if your product/service is

not available, who will the customer approach?”. The main strength of the car is its
affordable price, low maintenance cost, and high mileage. Therefore, in absence of our
entry-level vehicles, I believe the following will be some companies that the customer will
approach.
1. Ford, as it has the entry-level vehicle model - Figo
2. Maruti, it also has the entry-level vehicle model – Alto 800 and Celerio
3. Renault, for Renault Kwid
4. Hyundai for Santro.
5. Datsun for Datsun Redi go

b) Two Stage model of Competitor Analysis

Though the Customer-based analysis is the simplest and easiest way to figure out the
probable competitor. It would be very difficult to analyze what type of competitor they
would be. For e.g. Direct competitors, Indirect Competitors, and Potential competitors.
Also, we would not be able to figure out what kind and to what extent the competition
would we have with our competitors. So, in order to figure out this kind of information, we
have a two-stage model, proposed by Peteraf and Bergen, and published in Managerial and
Decision Economics (2002).
The model identifies the competitors along with the types in the first stage while in the
second stage it helps us gain an idea of how fierce the competition could we have.

Stage 1: Recognizing and Classifying the Competition

The framework is prepared based on the analysis of the demand side and supply side, 2-
dimensional mapping is prepared with one axis depicting the demand side (Resource
Similarities) and another axis a supply parameter (Market commonality). In market
commonality, the competitors are sorted on the basis of the extent they address the
customer’s need whereas the Resource similarities explain the extent to which their
resource endowment is similar in terms of type and composition.

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Figure 1: Mapping the competitive Terrain

While mapping such competitors we should always think of customer segmentation. As

explained earlier, our customer segment is middle-income families who are just upgrading
to four-wheelers from two-wheelers. Therefore, for that customer segmentation, at present,
Toyota, Nissan, BMW, and Skoda are not the present choice but they have the same
resource similarities and always have a possibility to launch some budget cars. Therefore,
they have been placed as Potential competitors whereas motorcycles, Pathao, and Electric
Vehicles are the substitutes that satisfy the same needs of the customer as did by Nepal
Motors Pvt. Ltd.

Stage 2: Evaluating the competition and predicting Rivalry

To facilitate evaluating the competition and making predictions regarding the likelihood of
attack and response, a second stage evaluation is carried out based on resource equivalence.
Resource equivalence is the extent to which a given competitor possesses strategic
endowments capable of satisfying the same customer needs as the focal firm (Nepal Motors
Pvt. Ltd.)

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Figure 2: A framework for Competitor Analysis

From the above framework, what it has been concluded is that:

a) As the Resource Equivalence between two firms increases, the likelihood of an attack
is reduced, Ceteris paribus. That means the possibility of attacks from Maruti, and
Datsun motors are less remaining other conditions the same.
b) As the Resource Equivalence between two firms increases, the likelihood of response
to a competitive attack is increased, Ceteris paribus.
c) When the degree of resource equivalence is high, the likelihood of attack increases as
we move from the class of direct competitors, to potential competitors, to indirect
competitors. Attack from Nissan motors would be more than Maruti and Datsun whereas
Nepal Motors are susceptible to attacks from Pathao and Electric Vehicles.
d) When the degree of resource equivalence is high the likelihood of response decrease as
we move from the class of direct competitors to potential competitor, to indirect
competitors. That means if we have made some attack on Electric Vehicles or vice versa,
the possibility of counter-attack from them is less.

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e) When the degree of resource equivalence is low, the likelihood of attack decreases as
we move from the class of direct competitors, to potential competitors to indirect
competitors.
f) When the degree of resource equivalence is low, the likelihood of response increases as
we move from the class of direct competitors, to potential competitors to indirect
competitors.

In conclusion what we see from the perspective of a competitive environment is that For
Nepal motors, whose strengths are fuel efficiency, low operation cost, and low price unlike
initially speculated, more threats are from the Pathao and Electric vehicles than that Datsun
and Maruti.

c) Strategic Group Analysis (SGA)

Before we start with the Strategic Group Analysis of Nepal Motors, Let us know what is a
strategic group. The strategic group is the group of companies that are in the same industries
and that function in similar ways and a strategic group analysis is a market research tools
that compare the attributes of competing companies.
The stepwise SGA has been carried out for the strategic groups for Nepal Motors Pvt. Ltd.
1) Make a list of Direct Competitors
i) Ford
ii) Hyundai
iii) Renault
iv) Maruti
v) Datsun
2) Distinguish between companies in the List

The distinguishing characteristics the above direct competitors could be made and have an
impact on the sales of Nepal Motors Company Ltd. are Price, Mileage, Operation Cost,
Customer Service, and Brand Values.

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3) Organize the companies on a map.

The map provides a picture of the competitor’s status at a glance. The position of the
company along with other competitors are presented in the graphs with the two most
important determinant variables chosen in step 2. Even among them, Pricing,
Mileage/operating cost, and Brand Value will predominantly affect the sales of entry-level
cars. Thus, for Strategic group mapping, we have chosen the same determinant variables.

Figure 3: Strategic Group Map

4) Evaluation of Data on Analysis

From the above Strategic Group map, we see that price-wise and the operational
cost/Mileage wise Nepal motors are the most attractive. Our strategy was also to provide
the vehicles at an affordable price with low operation cost, in the same category we find
Suzuki to be most near to us and then Kwid (Renault) whereas due to the brand value,
Hyundai also seems quite competitive and as the Ford is the most apart from Nepal Motors
we could be bit relax from the ford.

Not only that, the Strategic Group map provides an overall competitive picture of the
strategic group, from where we can see the degree of rivalry between Hyundai, Suzuki and

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Ford. Similarly, the extent of overlaps between Suzuki and Kwid(Renault) gives the idea of
the degree of competition between Suzuki and Renault.

d) Comparative SWOT Analysis

SWOT analysis is one of the major tools to direct the company to match the external
opportunities and Threats with the internal capacity of the firm. By carrying out the SWOT
analysis of all the possible competitors we and having a comparative SWOT chart we can
analyze the possible threats from the competitors.
From all the above discussion, we have seen that even among the direct competitors,
Suzuki and Renault are the close competitors, we will carry out in this section only a
comparative SWOT analysis among them.
STRENGTHS
Nepal Motors Suzuki Renault
Low Cost High Product range Comfort in the segment
Greater Mileage Good Mileage High product range
Great Customer Service Large network of service Good Brand Image and
centers Global presence
Low Operation Cost Easy availability of Spare Good Mileage
Parts
Premium Looks Good Brand Image in Asian
Market

WEAKNESS
Nepal Motors Suzuki Renault
Service centers City Blunt design Blunt Design
oriented
Less Network of Service Less features Less Network of Service
Center Center

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Nonabundant availability Service centers City

of spare parts oriented
Fewer features in the Nonabundant availability of
segment spare parts
Not much product range

OPPORTUNITIES
Nepal Motors Suzuki Renault
An increasing number of An increasing number of An increasing number of
customers moving towards customers moving towards customers moving towards
four-wheeler four-wheeler four-wheeler
Increase in Fuel cost

THREATS
Nepal Motors Suzuki Renault
The renowned brand of Threats from EV vehicles Threats from EV vehicles
motors can launch a low due to tax policies and fuel due to tax policies and fuel
cost-fuel efficient model cost cost
Threats from EV vehicles Threats from EV vehicles Threats from EV vehicles
due to tax policies and fuel due to tax policies and fuel due to tax policies and fuel
cost cost cost
Threats from the Pathao Threats from the Pathao Threats from the Pathao
riders riders riders

e) Competitive Profile Matrix

A competitive profile matrix (CPM) is a strategic management tool to compare the firm
with the major players of the industry that gives a clear picture of the strong and weak
points relative to their competitors. The Profile matrix identifies a firm’s key competitors
and compares them using the industry’s critical success factor as a result the firm could
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figure out the area of improvement. Critical Success factors (CSF) are the key areas that
determine a company’s success in the industry. The CSF depends upon the industry,
customer segment, and even the strategic groups. The more CSF you consider in the
analysis clearer would be the picture. But one CSF influence the success more than other
CSF therefore, each CSF is given various weightage depending upon the market research
or industry practice.
For the motor vehicle industry, we believe the following could be the Critical Success
factors. The weightage has been chosen based on owns the experience. And the competitive
profile matrix has only been carried out among the direct competitors and we will be rating
each CSF from 0 to 5 with 0 not appealing at all and 5 the most attractive.

Nepal Suzuki Renault Datsun Hyundai Ford

Weig
CSF Rati Sco Rati Sco Rati Sco Rati Sco Rati Sco Rati Sco
htage
ng re ng re ng re ng re ng re ng re
1.12 1.12 0.62
Price 0.25 5 1.25 4.5 5 4 1 4.5 5 3 0.75 2.5 5
Mileage 0.1 5 0.5 4 0.4 4 0.4 3 0.3 3 0.3 2 0.2
Operatio
n Cost 0.1 5 0.5 4 0.4 3.5 0.35 2 0.2 4 0.4 2 0.2
Style and
Premium
Looking 0.15 4 0.6 4 0.6 3 0.45 1 0.15 4 0.6 4 0.6
Features 0.1 2 0.2 3 0.3 2 0.2 1 0.1 4 0.4 4 0.4
Safety
features 0.1 1 0.1 2 0.2 2 0.2 1 0.1 4 0.4 4 0.4
Product
Range 0.1 1 0.1 4 0.4 3 0.3 1 0.1 5 0.5 4 0.4
Ground
Clearanc
e 0.05 4 0.2 3 0.15 3 0.15 3 0.15 3 0.15 3 0.15
Brand
Value 0.05 3 0.15 4 0.2 4 0.2 3 0.15 5 0.25 4 0.2
Total Score
obtained 3.6 3.775 3.25 2.375 3.75 3.175

From the above Competitive Profile Matrix, we see that Maruti Suzuki is the one with the
highest score indicating its competitive position in the industry and we see the clos

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competitor with its relative scores. Also, we can find the areas where we should make
improvements. Some of the major improvement, it needs to be improved are safety features
and other features.

Advantages of Competitor Analysis

Competitor analysis is an important tool to assess the competitors and their types, the extent
of attack from those competitors, etc. To create the strategy to obtain a competitive
advantage, first, we need to perform competitor analysis. Besides strategy preparation,
there are other advantages of Competitor analysis which are presented below.
i) Helps identify the competitor in the industry. All the players in the industry may
not be competitors, competitor analysis helps you in figuring out the types of
competitors and the extent of the threat.
ii) Helps determine the competitor’s strategies and actions and anticipate their
reactions based on the action of the attacks.
iii) Let’s capitalize on the weakness of the competitors and figure out the opportunities
available.

2. Defining ‘value’ as “the perceived worth of the set of benefits received by a customer in
exchange for the total cost of an offering, taking into consideration available competitive
offerings and prices” embodies seven fundamental lessons on customer value:

a. Value Is Customer-Defined
b. Value Is Opaque
c. Value Is Contextual
d. Value Is Multidimensional
e. Value Is a Trade-Off
f. Value Is Relative
g. Value Is a Mindset

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Let us first define what the value is. Value is the assessment of all that you get in return for all
that you give in exchange. That means the value is the worth of all sets of benefits a customer
gets over the cost incurred in getting the product/services, considering all available competitive
offerings and prices. Professor Mohanbir Sawhney has defined Customer value in 7 (Seven)
fundamental lessons.

1) Value is customer based

Customers do not buy any services and products but they exchange all sets of perceived
benefits with the perceived cost. That means the value is nothing but the exchange of cost
for benefits. Different customers have different needs, different wants, and different
desires. Customers’ Attitudes, culture, growth, and surrounding environment will also
make a different way of thinking and view any product or service from different
perspectives. For a single product in the same environment and same situation, one
customer may have one value whereas for the same product, the same environment, and
the same situation another customer may have another value. For example, a young
customer who is studying in his high school has great value for the looks and style of a
bike while a middle-aged person bearing his own family may not value much for the looks
and style of a motorbike. Thus, the value of any product or service differs from customer
to customer so the value is customer-defined.

2) Value is Opaque

As explained earlier, value is customer-defined. And it is very difficult to understand what

customer needs, what are their wants, and what are their desire. Many times, even the
customer may not know what type of product they actually wanted. For example, until the
apple company launched its first touchscreen mobile sets, the customer even didn’t know
they needed a cell phone that is easy to handle, aesthetically good-looking, and
multifunctional. Also, quantifying value is difficult because the language of the customer
and the marketer is different. Here the language we meant to say is the way the marketer
accesses the customer’s needs, wants, and desires. Usually, what marketers do to

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understand customer needs is they carry out a market survey and Focused Group
discussion. Though it is a good means of collecting information, it may not reveal all their
needs and desires. So, there is a barrier between the understanding of values made by the
customers and the marketers because of the language issue, because customer themselves
may not understand their needs and desires we say the customer’s value is opaque. We
need to figure out those going beyond these walls or barriers.

3) Value is Contextual

Value like beauty lies in the eyes of the beholder, it would be irrelevant to talk about the
value of a product without knowing the context within which the product will be evaluated,
bought, and used. Context is generally understood in three dimensions – end users, end-
use situation, and the environment. That means the value of the product/services depends
on who is going to use the product/service in what situation they are using it and in what
environment they are using it. For example, if an insurance company approaches a
manufacturing company for the insurance of the factory, the owner may not value the
insurance, but if somehow his factory caught fire and is destroyed and if the same insurance
company approaches the same owner for the insurance, at that time he would be easily
persuaded, he would have greater value for the insurance. Here the customer is the same,
and the product is the same only the difference is the context (situation and environment),
and the value earlier and after an incident is different. So, value is not constant, it changes
with the situation and the environment. Thus, Value is contextual.

4) Value is multidimensional

Usually what we find people talking about value is- people don’t buy products but they
buy a solution to their problem, if we don’t get into deep, what people understand is the
functional value. If we take it superficially it becomes if the customer wants to fire, he will
search for a matchstick. But it is not so, he will have comparative analysis, situational
analysis, emotional analysis, and economic analysis back in mind before he approaches for
a matchstick. Therefore, value does not only depend upon the functional dimension one

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need to consider various dimensions like- economic, social, psychological, cultural, etc.
while creating a value proposition. Therefore, Value is multi-dimensional.

5) Value is a trade-off

Value is a trade-off that is fundamentally understood with the definition of the value itself.
Value is all that we get in exchange for what we give. Thus, it is the trade-off between all
the benefits (functional, emotional, social, cultural, and all seen and unseen benefits) that
a customer perceives and the cost (direct cost, indirect costs, effort, time, innovation,
experience etc.) perceived by the customer. When the perceived benefits outweigh the
perceived cost only then customer approach the product or service. That is why sometimes
people define value as the difference between the perceived benefits and the perceived cost
or the ratio of perceived benefits and the perceived costs. Clearly, Value is a trade-off
between (perceived) benefits and (perceived) Costs.

6) Value is Relative

Customers always evaluate the value relative to the available alternatives. They will try to
figure out all the alternatives that will serve their functional purpose along with other
emotional, social and cultural purposes and among them, the one with the greatest
perceived benefit to the cost ratio is chosen. Thus, the value for the product is relative to
the value of the competitors or substitutes. For example: In Kathmandu, King curd- juju
dhau is relatively liked by most people and the cost is also just relatively high because if it
has been marked exceptional cost, then the customer would have gone for normal curd
reducing its market. Thus, the value for any product is relative to the value of the competitor
and its substitutes.

7) Value is a mindset
The perspective of business strategy and values has drastically changed. Unlike earlier,
now whatever the firm does shall revolve around the customer instead of the product.
Customer value should be the reason for being for any firm. Hence firms should change
their values according to the values of the customers. The strategies, value propositions,

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and all the departments of the organizations should adopt a mindset that is customer-
centric, not product-focused.

3. The positioning task addresses three fundamental questions: what meanings can I (the
company) claim that is (1) different from those of competitors, (2) relevant and desirable
to target consumers in that they resonate in their lives and in the broader culture, and
(3) credible in that that the company can legitimately pull off the positioning platform
with the support of business models and collaborators. Give your discourse on these three
elements of positioning which amplifies the logic behind positioning decisions and
highlight the complications faced in executing the Positioning = Differentiation +
Relevance + Credibility formula for the brand.

Before we start with the elements of positioning that defines the positioning. It would be
relevant, to begin with, what is brand and what is positioning.

A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify
the goods/services of one seller or group of sellers to differentiate them from those of
competitors. A brand is the identification of a product linked to the company. Whereas,
positioning refers to creating a special place or image in the customer’s and prospective
customers’ mind that stands apart from the product of the competitor with the aim of raising
firms’ potential benefit to the highest level.

The note developed from the published sources by Anna Eng under the supervision of
Professor Susan Fournier, Boston University explains that Positioning as the summation of
differentiation, Relevance, and Credibility.

Differentiation

The first essential quality of effective positioning is differentiation. Differentiation is the act
of distinguishing one’s product or service from another competitor to make it more attractive
to a particular target market segment. Differentiation is a generalized term; we cannot just

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distinguish the features of the Compact SUV and compete with the Hatchback. To understand
the positioning and take competitive advantage through differentiation, first we should
understand who are the competitors and what segments we are competing. To define these
things, we must essentially understand the term- Point of Parity (POP) and Point of Difference
(POD).

Point of parity is basically industry standards that help make a business legitimate in its
respective fields. The qualities that all businesses have to be on par in order to be successfully
competitive or in other way, points of parity are the elements that are essential for a brand to
be considered as a full-fledged competitor in that particular category. POP are like those
qualities that make a consumer remember and consider your brand along with your competitor.
For example: if you want to have a cold drink, what you remember are Coca-Cola and Pepsi
and its product, the point of parity is the carbonated drinks. After accessing the Point of Parity
only we can figure out the competitor and there is a meaning of Point of difference.

Point of difference (POD) is the features of services or products which are cornerstones in
establishing the differentiation among the competitors. These are the unique features that only
you can have and the rest of your competitor does not. For example, for the iPhone, the
operating software developed by the company is a unique feature that other cellphone
companies do not have. Therefore, the OS of the iPhone is the POD for Apple company and
because of this POD (smooth OS of iPhone), it is getting a competitive advantage and is able
to position its brand.

Differentiation could only be created when you meet both points of parity and point of
difference and differentiation is one of the means to create brand positioning.

Relevance

As explained earlier, the brand must occupy a differentiated position but only the
differentiation positioning could not be achieved it shall be relevant, resonant, and valuable
both in the culture and in the customer’s mind. As previously explained that value is contextual,
if you want to position you need to connect with or relevant to the customer, their wants, needs,

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desire, their social lifestyles, and culture then only the differentiated positioning can be
resonated with the customer’s value and the brand positioning could be sustained and brand
would be imprinted in the customer’s mind.

The failure of Premier smokeless cigarettes has taught us about the importance and need of
relevance in positioning the brand. Harley-Davidson tapped into a deep American myth
relating to freedom and rebellion: freedom from conventions and restrictions, and freedom to
be oneself which resonate with the emotional value of the customer, and the brand positioning
of Hardly-Davidson is linked with freedom. This is how the positioning shall be linked with
contextual relevance.

Credibility

We can establish the positioning of the company with the aid of differentiation and relevance
but it will not sustain without credibility. Credibility is the believability and trust on the firm
that whatever promise the company has made (differentiation) to connect and print the image
of the brand in the customer’s mind to be maintained forever. Without credibility, brand
loyalty decreases and ultimately it will affect the positioning. Thus, to maintain brand loyalty
and positioning, the firm must be capable enough and committed strongly to maintaining the
same image that has been imprinted in the customer’s mind.

How important is credibility in positioning could be understood by the failure of Gucci. Gucci
has been a venerable luxury brand for many years and found itself with an antiquated business
model in the 1980s that was no longer able to support a luxury, high-end positioning for its
brand. Gucci could not run with time and the fashion trend and luxury for what the Gucci had
its brand image. Since it could not maintain its credibility, it could not maintain its positioning.

Thus, credibility is important to maintain the trust level between the customer and the firm for
what the brand has committed to serve the customer. Without credibility positioning could not
be sustained in long run.

With all the above discussion, it is pretty much clear that for positioning these three parameters
are the fundamentals but it is not the all. There are other various factors which will affect the
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positioning of the firm. But what it could be ascertained that the summation of differentiation,
Relevance, and Credibility would make a major of the positioning.

4. NEW COKE: CASE STUDY: What are the lessons we can learn from this case? Relate
the case and its issues with the theories and concepts studied in the subject.

New coke is one of the greatest marketing failures in history. Though there is a legitimate
reason to worry about the competitive position change in the formula the coke, with the result
of the change in taste, we learned many things from its failure. Some of the key learning is
explained below with the link to theories we have learnt so far in Strategic marketing.

1) Importance of Brand

Established on May 8, 1886, even before first world war I and World War II, Coca-Cola is
the only drink available at the time. The drink was so popular that it became a culture for
Americans to have Coca-Cola to quench their thirst. Not only in America Coca-Cola was
spread worldwide by the end of 1985. Coca-Cola dominated the soft-drink market. People
grew up with the taste of Coca-Cola. It had a history with the American spacecraft. Its
history is also linked with the world war. Coca-Cola was not only the culture it also
symbolized friendship and social belonging after WWII. It had a legacy. It is a brand. But
until the failure of New Coke, the world knew what the brand means and how can it affect
marketing. In the marketing sector, a new chapter was added as Brand and Brand
Positioning.

2) Value is Multidimensional

Coca-Cola company conducted a Pepsi Challenge to take a survey about the tastes between
Coca-Cola and Pepsi and the result was against Coca-Cola. So in order to maintain its
legacy of number one soft drink manufacturer, Coca-Cola decided to change the taste of
old Coca-Cola and bring New Coke with taste even better than Pepsi. But astonishingly

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the product fails and it needed to relaunch the old taste of Coca-Cola with as Classic. This
event has taught us that customer value is not only functional. If it had been only the
functional or physical then, the result shall be in favor of Coca-Cola as suggested by the
survey conducted but it didn’t happen because the customer value for Coca-Cola was not
only linked with the taste, it was also linked with the history, culture, social belonging, it
was emotionally connected to the customer. Thus, the customer value is multidimensional.

3) There shall be a balance between the Point of Parity and the point of difference

Coca-Cola introduced a new coke with a different taste, which was a sudden and important
differentiation from the classical one. Customers view this sudden differentiation in a
different way and could not connect to the original brand of Coca-Cola which lost its
positioning of the Coca-Cola. Thus, the failure of Coca-Cola also taught us that for
differentiation to adopt, point of difference shall be so modified that the customer can
connect the change with the original image of the product.

4) Mobility Barrier

From the failure case of the new coke, we learned more about the mobility barrier. Even
if Coca-Cola wants to change some of its features to compete with some other customer
segments it cannot do because of its brand and image. So, there will be a kind of mobility
barrier in business from one strategic group to another. The mobility barrier may take any
form like size of the market, Capital investment, Brand Value, etc.

5) Priority to its Loyal Customers

When in competition, we should always keep our most loyal consumers at the priority
while making any decisions. If we lose the hearts of those who were with us when we first
started, we risk losing the very foundation of your product.

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