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Tailoring Strategies to Fit Specific Industry and Company Situations

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Presentation on theme: "Tailoring Strategies to Fit Specific Industry and Company Situations"— Presentation transcript:

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 –


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