Introduction: The initial strategic directions include market penetration, consolidation, product development, market development, and diversification. Market penetration was the initial strategic direction chosen for our company – the Desire Company aiming to market entry-level cameras and multi-featured cameras to four market regions Europe-Africa, Asia-Pacific, Latin America, and North America. There are two reasons for it. Firstly, we did not know the operation of the company when we took over it and we didn’t want to venture. Moreover, the company can increase its market share which implies increased economies of scale and experience curve benefits by the market penetration. Generic strategy: Generic competitive strategies include cost leadership strategy, differentiation strategy and focus strategy (low cost and differentiation). The below chart is the Porter’s Generic Competitive Strategies.
As the target scope of our company was the whole industry, the cost leadership strategy and differentiation strategy were available to us. Moreover, the cost leadership strategy was advantageous to us because of our initial strategic direction market penetration. Therefore, our company entered the industry as a cost leader. Industry overview: The external environment of company has three layers – the macro-environment, industry (or sector), and competitors and markets. From the analysis of the external environment, specific strategic opportunities and threats for the organization can be identified.
Industry analysis Industries or sectors can be analyzed by the Porter’s five forces framework – the threat of entry, the threat of substitutes, the power of buyers, the power of suppliers, and competitive rivalry.
The threat of entry The threat of the digital camera industry entry is medium because of the medium capital requirements of entry. Moreover, the threat of the digital camera industry entry is low because of differentiation. Overall, the threat of the...
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