Business Strategies in the Counterfeit Market

Counterfeit trade is amulti-billion dollar industry affecting anever-wider range of goods andmarkets. Despite the
diversity of counterfeit products in terms of complexity, manufacturing techniques, investments in production
facilities, potential dangers or value for the users, and degrees of conflict for the counterfeit producers with the
local authorities, current academic literature still refers to counterfeit producers as one homogeneous group.
Against this background, the present study investigates the existence of strategic groups among counterfeiters
based on an empirical examination of counterfeited products using cluster analysis. The results indicate that
brand owners are confronted with five different groups of counterfeiters: (1) disaggregators, (2) imitators, (3)
fraudsters, (4) desperados, and (5) smugglers. The findings of this study contribute to a more differentiated
understanding of each group's learning and growth strategies and help practitioners to better position their
companies with respect to the counterfeit market.