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8
Tailoring Strategy to Fit Specific Industry and Company Situations
Screen graphics created by: Jana F. Kuzmicki, Ph.D. Troy State University-Florida and Western Region
8-1 McGraw-Hill/Irwin
Most important drivers shaping a firms strategic options fall into two categories
8-2 McGraw-Hill/Irwin
several competing technologies will win out Low entry barriers Experience curve effects may permit cost reductions as volume builds Buyers are first-time users and marketing involves inducing initial purchase and overcoming customer concerns First-generation products are expected to be rapidly improved so buyers delay purchase until technology matures Possible difficulties in securing raw materials Firms struggle to fund R&D, operations and build resource capabilities for rapid growth
8-3 McGraw-Hill/Irwin
expertise
customer expectations
8-5 McGraw-Hill/Irwin
resources competencies
Adapt
production capacity
Product innovation and new end uses harder to come by International competition increases Industry profitability falls Mergers and acquisitions reduce number of industry rivals
8-7 McGraw-Hill/Irwin
fastest growing market segments Stress differentiation based on quality improvement or product innovation Work diligently to drive costs down
Cut
marginal activities from value chain Use outsourcing Redesign internal processes to exploit e-commerce Consolidate under-utilized production facilities Add more distribution channels Close low-volume, high-cost distribution outlets Prune marginal products
8-11 McGraw-Hill/Irwin
that many firms are required to satisfy buyer needs Low entry barriers Absence of scale economies Buyers require small amounts of customized or made-to-order products Market for industrys product/service may be globalizing, thus putting many companies across the world in same market arena Exploding technologies force firms to specialize just to keep up in their area of expertise Industry is young and crowded with aspiring contenders, with no firm having yet developed recognition to command a large market share
8-13 McGraw-Hill/Irwin
Runner-up firms
Well-known reputation
Proven strategy
Focusers
Im trying!
Perennial runners-up
8-19 McGraw-Hill/Irwin
with small market share face obstacles in trying to strengthen their positions
Less access to economies of scale Difficulty in gaining customer recognition Inability to afford mass media advertising Difficulty in funding capital requirements
8-20 McGraw-Hill/Irwin
market share
Lower costs and prices to grow sales or Out-differentiate rivals in ways to grow sales
Withdraw
8-21 McGraw-Hill/Irwin
from market
quickly
Involves gradually sacrificing market position
8-24 McGraw-Hill/Irwin
Chapter
8
Tailoring Strategy to Fit Specific Industry and Company Situations
Screen graphics created by: Jana F. Kuzmicki, Ph.D. Troy State University-Florida and Western Region
8-26 McGraw-Hill/Irwin