When you’re No. 2

Hi,

Every market has a No.1 (Leader) and a No.2 (Challenger). While a Leader need only defend, a challenger must attack. Challengers who take on the leader with a full frontal attack so run out of soldiers (budget). But Challengers more often by-pass the Leader's frontlines to attack on its flanks, on a weak spot, hoping to cause disarray in the ranks. Qantas was attacked by Virgin Blue and Impulse on price. Qantas - like a good leader - knew it need only defend its share by meeting the challenge with a blocking move. Hence JetStar. This gives Qantas a slice of the emerging budget airline market (built by Virgin and Impulse) and gave these intruders someone to fight with, to exhaust their resources. Flanking attacks explain the landscape of the Australian luxury car market. Mercedes was the category leader: it held the position "luxury motoring" based on its 'engineered like no other car'. BMW attacked Benz's stodgy handling and sluggish acceleration by adopting the 'driving experience' position - appealing to a younger market. Lexus attacked both on price and the 'ownership experience' (a lifestyle benefits program). Benz responded with a range of low end product to meet BMW in the younger market, and an expanded range of sporty models. Both blocking moves.

Cheers!

Michael Kiely