“SPHERE OF INFLUENCE
can create profitable biz environment while pushing rivals into a corners” Chaotic change and continuous entry can sometimes be creative, but it can also be wasteful and profitless. It’s time to create order in the competitive environment by building strong and rational Sphere of influence. It is more than a corporate portfolio of products. It is a powerful arsenal that enables a company to project its power and dominate the larger competitive space. The objective is to occupy significant portion of the attractive markets in that space. It consist in:
* core geographic and product zones: is the centre where people hope to have dominant value leadership and market share * vital interests: are geographic and product zone, maybe complementary products or biz that provide key sources (know.how, raw m, skilled labour). Ex: Microsoft portable device OS. * pivotal zones: markets that creates the balance of power in the long run to combative competitors. Ex: Microsoft MSN * buffer zones: cuscinetti: defendable position in expendable markets that protect from rivals expansion. Ex: Microsoft game applications. * forward positions: front line products very near the rival’s core biz. Are used to attack or to maintain the stability. Serious enough but not so strong to initiate a war. To assure Mutual Forbearance and to prevent mutually assured destruction. Sometimes fail to make money but they might win the war. Ex: P&G and J&J, Pampers vs Neutrogena. * Moreover, project power to beget more power or bundling extra products/services to the core ones in order to influence profitability (GMAC) or rivals who lack similar bundles (Microsoft vs Netscape) Buffer zones and forward position are the most successful actions to be taken. Benefits:
* move competitors into a corner
* reduce price wars through the equivalent of “mutually assured destruction”, * encourage rivals to grow in non-conflicting markets
* shape the...
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