Brand Relevance: Making Competitors Irrelevant - always yours

MARKET DYNAMICS IN THE AUTOMOBILE INDUSTRY 125
• Each of the winners was highly differentiated. There was a
substantial space between the existing products and each
new subcategory on a host of dimensions.
• Each of the winners created meaningful barriers to entry.
The Prius technology, the Saturn dealer network and culture,
the Chrysler design, and the Enterprise and Zipcar
operations and storefront presence all made it hard for
competitors to respond. The Nano ’ s cost difference, based
on many innovations plus sourcing and manufacturing
effi ciencies, made it diffi cult to match.
• Competitor priorities rather than barriers were seen as the
primary reason why competitors failed to respond in several
cases. Competitors that focused on automation, on diversifi
cation, on such other product lines as trucks and SUVs,
and on dealing with issues like voluntary quotas were not in
a position to join a new subcategory. A strategic evaluation
of a new concept should know that competitors will decide
whether to participate in part by considering competing
problems and opportunities.
• In each case to develop of a strong brand was crucial in creating
a barrier to competitors and in defi ning the category
or subcategory. In the case of the Prius, Toyota ’ s decision to
restrict the brand to hybrids enabled self - expressive benefi ts
that never would have been possible had the new car been
branded as a Corolla Hybrid, the route that Honda took.
For Discussion
1. What are other examples of cars that created a new category
or subcategory? Were they able to avoid competition? How?
What barriers did they create?
2. Consider the process of concept generation. How did each
of the concepts emerge? To what extent was the stimulus an