1. Tailoring Strategies to Fit Specific Industry and Company Situations
Chapter 8
Tailoring Strategies to Fit Specific Industry and Company Situations

2. Life Cycle
Unit Sales
Profits

3. Life Cycle
Emerging
Embryonic
Introduction
Growth
Mature
Decline

4. Industry Life Cycle

5. Challenges of Emerging Industries
Uncertain market conditions and characteristics
Competing/unknown proprietary technologies and varied marketing/service/distribution tactics
Lack of complementary products
Limited/poor quality and high costs, which deter acceptance
Low entry barriers
Education of users
Innovators vs. Initial adopters
vs. Mass-market.

6. Alternatives in Emerging Industry
Move fast/early with superior product or technology
Track the Dominant Design
Build alliances/merge with key suppliers or those that provide complementary products to out position rivals
Seek new customer groups, new applications for your product
Make it cheap/easy for early adopters to try/buy your product.

7. High Technology Industries
Rapidly changing scientific knowledge underlying attribute for competition
R&D/Sales
Battle over technical standard, format, and dominant design
Set by decree, cooperation, public domain, but mostly through consumer choices

8. Benefits for Standards
Compatibility
Reduce consumer uncertainty
Reduce production costs
Increase in complementary products – Network effects – which greatly enhances sustainability
Lock outs and switching costs

9. Winning Format Wars Ensure complementary products Killer applications
Razor and blade strategy
Cell phones, printers, satellite TV/radio, video games
Cooperative competition
Licensing

10. Challenges of Growth Environments
Rapid technological changes
Short product life-cycles
Many new entrants and strategies
Changing customer demands/preferences.

11. Alternatives in Growth Environments
Drive down costs through scale
Invest heavily in product R&D to differentiate, staying on the technological frontier
Expand distribution and geographic coverage
Expand product line to appeal to new customers

12. Challenges of Mature Industries
Slow growth fight for market share
Sophisticated buyers
Costs, prices and service critical
Excess capacity and oversupply
Innovation and new uses more difficult
International competition
Falling profitability
Consolidation
Segmentation.

13. Alternatives in Mature Industries
Prune product line
Process innovation & cost reductions in value chain
Sell more to current buyers
Purchase rivals at low prices
Go international.

14. Fragmented Industries
Low entry barriers
Lack of economies of scale
High segmentation
Local Advantages
Diverse preferences

15. Alternatives in Fragmented Industries
Formula facilities -
Low cost operations -
Become the specialized vendor of choice -
Focus on a customer type -
Focus on a geographic segment -

16. Problems for Runner-ups
Lower economies of scale
Lack of recognition
Limited exposure in mass media
Capital limitations.

17. Alternatives for Runner-ups in Scale Sensitive Industries
Use lower price points
Merge/acquire rivals to increase market share
Invest in cost-saving techniques
Pursue radical innovation to change the rules of the game.

18. Other Runner-up Strategies
Vacant Niche Strategy -
Specialists Strategy -
Superior Products Strategy -
Distinctive Image Strategy -
Content Follower –