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Module Outline
Strategies for Competing in Emerging Industries Strategies for Competing in a Maturing Industry Strategies for Firms in Declining Industries Strategies for Firms in Fragmented Industries Strategies for Competing in International Markets Strategies for Industry Leaders Strategies for Runner-Up Firms Strategies for Weak Businesses Thirteen Commandments for Crafting strategies
Move quickly when technological uncertainty clears and a dominant technology emerges Use price cuts to attract price-sensitive buyers Expect established firms looking for growth opportunities to enter market when risk lessens
A firms manufacturing share can be bigger than its own branded share since it makes brands for other sellers
Extra manufacturing volume may open door to achieving lower costs
Multi-Country Strategy
Matches strategy to host country circumstances Works best when
Market conditions are diverse among countries Buyers insist on highly customized products Buyer demand for product exists in few markets Host government regulations preclude uniform global approach
Two drawbacks:
1. Entails little coordination across countries 2. Not tightly based on competitive advantage
Global Strategy
Works best when
Great similarities in products and buyer requirements exist among countries
Involves
Coordinating firms strategic moves worldwide Selling in many, if not all, nations where significant buyer demand exists
Strategic Alliances
Concept Agreements between firms to do business together in ways that go beyond normal firto-firm dealings but fall short of merger or full partnership Competitive Strategy Principle More effective in combating competitive disadvantage than in gaining competitive advantage!
Strategic Alliances
An alliance can take form of
Joint research efforts Technology-sharing Joint use of production facilities Marketing one anothers products Jointly manufacturing components of assembling finished products
Domestic-Only
Strategic intent is focused on home country market
A country is a firms profit sanctuary when it derives a substantial fraction of total profits from sales in that country Generally, a firms most strategically crucial sanctuary is its home market
Most powerful when global firm with multiple profit sanctuaries is intent on
Achieving global market dominance
A global firm can use lower prices to siphon a domestic firms customer while
Gaining market share, and Covering losses with profit earned in another critical market
Stay-On-The-Offensive Strategy
Best defense is a good offense Be a first-mover Relentlessly pursue continuous improvement and innovation Force rivals to scramble to keep up Launch initiatives that keep rivals off balance Try to grow faster than industry and to wrest market share from rivals
Follow-The-Leader Strategy
Basic objectives Leaders strategic posture involves
Using its competitive muscle to encourage runner-up firms to be content followers Signaling smaller rivals that moves to cut into leaders business will be hard fought
Follow-The-Leader Strategy
Strategic Themes Be quick to meet all competitive price cuts Be ready to counter with large-scale promotional campaigns if challengers boosts advertising Offer better deals to major customers of next-in-line firms Use hardball measures to signal aggressive small firms who should lead
Content Followers
Willing to coast along in current position because profits are adequate
Long-term
Orderly market exit
End of Module 6