The Bypass Strategy
Probably the most difficult and failure-prone of all plans, the bypass strategy enables attackers to bypass its chief competitors and diversify into unrelated products or markets. From a military perspective, this may work as a temporary flanking strategy, but in marketing it runs the risk of diluting the core business and central operating strategy, extending resources into areas where the company had no business being. Pepsico diluted its core competency—the production and distribution of soft drinks—to move into the fast food market, purchasing brands such as Taco Bell and KFC. The move was well out¬side the influence sphere of its chief competitor, Coca-Cola. The Atlanta-based soft drink producer retrenched and stuck to its primary purpose—producing Coke. Coca-Cola was and still re¬mains the leader of the two brands in markets worldwide. One company that was able to diversify successfully was Virgin, the massive British-based music retailer that acquired and has made a rousing success out of Virgin Atlantic Airlines. According to entrepreneur/owner Richard Branson, if you" can succeed with one company, you can succeed with them all. Branson's belief is that if you break the right rules of business, you're bound to gain ground. Go figure.
The bypass attack allows the attacker to circumvent its chief competitors and diversify into unrelated products or unrelated geographical markets for existing products.
For example,Eastman Kodak Co.successfully used a bypass approach into such diverse areas as electronics and biotechnology, with products as diverse as electronic publishing systems,cattle feed nutrients, and anti cancer drugs.
However, this relatively sudden move into diverse fields followed an ultraconservative period in which Kodak temporarily stalled and competitors grabbed such markets as instant photography, 35mm cameras, and video recorders.All of which were natural extensions of Kodak’s core business.The...
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