Strategic Management

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Tailoring Strategy Chapter Title to Fit Specific Industry and Company Situations

“In a turbulent age, the only dependable advantage is reinventing your business model before circumstances force you to. Gary Hamel and Liisa Valikangas

Chapter Roadmap
Strategies for Competing in Emerging Industries Strategies for Competing in Rapidly Growing Markets Strategies for Competing in Maturing Industries Strategies for Competing in Stagnant or Declining Industries Strategies for Competing in Turbulent, High-Velocity Markets Strategies for Competing in Fragmented Industries Strategies for Sustaining Rapid Company Growth Strategies for Industry Leaders Strategies for Runner-up Firms Strategies for Weak and Crisis-Ridden Businesses Ten Commandments for Crafting Successful Business Strategies 8-3

Matching Strategy to a Company’s Situation
Nature of industry Most important drivers shaping a firm’s strategic options fall into two categories Firm’s competitive capabilities, market position, best opportunities 8-4

and competitive conditions

Features of an Emerging Industry
New and unproven market Proprietary technology Lack of consensus regarding which of several competing technologies will win out Low entry barriers Experience curve effects may permit cost reductions as volume builds Buyers are first-time users and marketing involves inducing initial purchase and overcoming customer concerns First-generation products are expected to be rapidly improved so buyers delay purchase until technology matures Possible difficulties in securing raw materials Firms struggle to fund R&D, operations and build resource capabilities for rapid growth 8-5

Strategy Options for Competing in Emerging Industries
Win early race for industry leadership by employing a bold, creative strategy Push hard to perfect technology, improve product quality, and develop attractive performance features Consider merging with or acquiring another firm to Gain added expertise Pool resource strengths

When technological uncertainty clears and a dominant technology emerges, try to capture any first-mover advantages by moving quickly Form strategic alliances with Companies having related technological expertise or Key suppliers 8-6

Strategy Options for Competing in Emerging Industries (continued) Pursue new customers and user applications Enter new geographical areas Make it easy and cheap for first-time buyers to try product Focus advertising emphasis on Increasing frequency of use Creating brand loyalty

Use price cuts to attract price-sensitive buyers

Strategic Hurdles for Companies in Emerging Industries
Raising capital to finance initial operations until
Sales and revenues take off Profits appear Cash flows turn positive

Developing a strategy to ride the wave of industry growth
What market segments to pursue What competitive advantages to go after

Managing the rapid expansion of facilities and sales to position a company to contend for industry leadership Defending against competitors trying to horn in on the company’s success 8-8

What Is the Key to Success for Competing in Rapidly Growing Markets?

A company needs a strategy predicated on growing faster than the market average so it Can boost its market share and Improve its competitive standing vis-à-vis rivals


Strategy Options for Competing in Rapidly Growing Markets
Drive down costs per unit to enable price reductions that attract droves of new customers Pursue rapid product innovation to Set a company’s product offering apart from rivals Incorporate attributes to appeal to growing numbers of customers

Gain access to additional distribution channels and sales outlets Expand a company’s geographic coverage Expand product line to add models/styles to appeal to a wider range of buyers 8-10

Industry Maturity: The Standout Features
Slowing demand breeds stiffer competition More sophisticated buyers demand bargains Greater emphasis on cost...
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