1. Business Unit Strategy: Concepts & Special Dimensions
Michael Seymour
Matt Anderson

2. 3 Contexts (Stages) of Industry Evolution
Emerging Stage
High Costs (Often Unpredictable)
Technology is Immature
Fierce Competition
Low Barriers to Entry
Undeveloped Supplier Relationships/Distribution Channels
Growth Stage
Increased Segmentation
Focus Shift to Expanding Market Shares
Customers become More Knowledgeable
Entry of ‘Follower’ Firms
Maturity & Decline Stage
Firm Must Chose Balance Between:
Low-Cost/Differentiation Strategy
Multiple/Single Industry Segments
Declining Growth → Less Forgiving Environment
Attractive Profits are Still Attainable

3. Exit Decisions Tend to be Extremely Difficult: Exit Barriers
“Ripple Effect”

4. Strategy in Fragmented Markets
Fragmented Industry:
No Single Company or Small Group of Firms has Large enough Market Share to Strongly Effect Industry Structure/Outcomes
Success is Dependant on Creative Strategizing
Ex: H. Wayne Huizinga & Waste Management Corp.

5. Strategy in Deregulating Environment
Deregulation: Lifting of Artificial Entry Constraints that Allows New Players to Enter a Market
(1975) SEC Abolished Fixed Rates for U.S. Securities Brokers
Has both Positive & Negative Impact on Markets

6. Strategy in Hypercompetitive Industries
Hypercompetitive Market: Characterized by Intense Competitive Rivalry, Short Product Life Cycles, Emergence of New Technologies & Major Shifts in Market Boundaries
Success Often Depends on Element of Surprise
3 Major Qualities Needed to Succeed

7. Special Dimensions Speed Creating Value through Innovation
Pressures to speed
Requirements of speed
Methods to speed
Consequences of speed
Creating Value through Innovation

8. Speed The key to success in more and more industries
How a company responds to meeting customer’s expectations
Public images are synonymous with speed
Ex: Domino’s, AAA

9. Pressures to Speed Customer expectations
Need for competitive advantage
Competitor strategies
Industry shifts

10. Requirements of Speed Refocused mission Compatible culture
Communication upgrades
Process reengineering
New metrics

11. Methods to Speed Streamline operations Upgrade technology
Form partnerships

12. Creating Value through Innovation
Sustaining innovation
Some are incremental, others are breakthroughs
Disrupting innovation
Disrupts established basis of competition
Focus on growth rather than profit
Create a culture of innovation

13. Culture of Innovation Steps Top-level commitment to innovation
Long-term focus
Flexible organization structure
loose and tight planning and control
Include appropriate incentives by creating an environment for innovation