Chapter 6 Strengthening a company s competitive position strategic moves timing and scope of operations

Topics: Strategic management, Vertical integration / Pages: 35 (3164 words) / Published: May 18th, 2015
CHAPTER 6

STRENGTHENING A
COMPANY’S COMPETITIVE
POSITION: STRATEGIC
MOVES, TIMING, AND
SCOPE OF OPERATIONS

© 2013 by McGraw-Hill Education. All rights reserved.

6–1

1. Learn whether and when to pursue offensive or defensive strategic moves to improve a firm’s market position.
2. Recognize when being a first mover or a fast follower or a late mover is most advantageous.
3. Become aware of the strategic benefits and risks of expanding a firm’s horizontal scope through mergers and acquisitions.
4. Learn the advantages and disadvantages of extending the firm’s scope of operations via vertical integration.
5. Become aware of the conditions that favor farming out certain value chain activities to outside parties.
6. Understand when and how strategic alliances can substitute for horizontal mergers and acquisitions or vertical integration and how they can facilitate outsourcing.

6–2

MAXIMIZING THE POWER
OF A STRATEGY
Making choices that complement a competitive approach and maximize the power of strategy

Offensive and
Defensive
Competitive
Actions

Competitive
Dynamics and the
Timing of Strategic
Moves

Scope of
Operations along the Industry’s
Value Chain

6–3

CONSIDERING STRATEGY-ENHANCING
MEASURES


Whether and when to go on the offensive.



Whether and when to employ defensive strategies.



When to undertake strategic moves—first mover, a fast follower, or a late mover.



Whether to merge with or acquire another firm.



Whether to integrate backward or forward into more stages of the industry’s activity chain.



Which value chain activities, if any, should be outsourced.



Whether to enter into strategic alliances or partnership arrangements.
6–4

GOING ON THE OFFENSIVE—
STRATEGIC OPTIONS TO IMPROVE
A FIRM’S MARKET POSITION


Strategic Offensive Principles:


Focus on relentlessly building competitive advantage and then converting it into sustainable advantage.



Apply resources where rivals are least able to defend themselves. ●

Employ

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