Market Follower Strategy is a strategy used by an organization who imitates what the market leader does. These companies do not overtake or challenge the market leader. Also, these companies earn a lot of profit as they do not bear the expenses of innovation.
There are 4 main market follower strategies i.e.
In this strategy, the company copies the product of the market leader and sells it in the black market. Eg.- Watches of luxury brand been sold such as Rolex, pirated movie CDs.
Here, the company not only replicates the product of market leader but also name and packaging of that company with minor differences. Eg- Shoes of Adidas are been sold as Abidas or Puma is been spelled and sold as Pooma/POMA.
In the imitator strategy, the follower company imitates the product of leader company but maintains its own difference and quality in the product. They offer the product to the customers at compromised quality but the characteristics are exactly the same or similar. Eg: IBM possessed the technology to bring a personal computer long before Apple or Microsoft.
The adaptor strategy is also termed a white collared strategy. This is a stereotyped strategy which is used by many companies. The follower companies create products that are improved versions or adapted from the goods and services that are already present in the market. Eg – Every company comes out with a better version of a car than another.
These companies learn from the mistake of the market leader. And they copy or innovate the product and launch in the market which helps them earn huge amount of profits as they do not have to bear the cost of research and development plus the product education cost.