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Strategy for Specific Strategy for Specific Industry and Company Industry and Company Situations Situations Dr. Sanjay Jain Associate Professor Pacific Institute of Management & Technology, Udaipur [email protected] +91-9950-9950-74

Dynamic & Stable Markets

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Page 1: Dynamic & Stable Markets

Strategy for Specific Strategy for Specific Industry and Company Industry and Company

Situations Situations

Strategy for Specific Strategy for Specific Industry and Company Industry and Company

Situations Situations

Dr. Sanjay JainAssociate Professor

Pacific Institute of Management & Technology, [email protected]

+91-9950-9950-74

Page 2: Dynamic & Stable Markets

RoadmapRoadmapRoadmapRoadmap

Strategies for Competing in Emerging Industries Strategies for Competing in Turbulent, High Velocity

Markets Strategies for Competing in Maturing Industries Strategies for Firms in Stagnant or Declining Industries

Page 3: Dynamic & Stable Markets

Features of anFeatures of anEmerging IndustryEmerging Industry

Features of anFeatures of anEmerging IndustryEmerging Industry

New and unproven market Proprietary technology Which of 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

Page 4: Dynamic & Stable Markets

Strategy Options for Strategy Options for Competing Competing

in Emerging Industriesin Emerging Industries

Strategy Options for Strategy Options for Competing Competing

in Emerging Industriesin Emerging Industries Win early race for industry leadership by employing a bold,

creative strategy

Push hard to perfect technology, improve product quality, and develop attractive performance features

Move quickly when technological uncertainty clears and a dominant technology emerges

Form strategic alliances with

Key suppliers or

Companies having related technological expertise

Page 5: Dynamic & Stable Markets

Strategy Options for Strategy Options for Competing Competing

in Emerging Industriesin Emerging Industries (continued)(continued)

Strategy Options for Strategy Options for Competing Competing

in Emerging Industriesin Emerging Industries (continued)(continued)

Capture potential first-mover advantages

Pursue

New customers and user applications

Entry into new geographical areas

Focus advertising emphasis on

Increasing frequency of use

Creating brand loyalty

Use price cuts to attract price-sensitive buyers

Page 6: Dynamic & Stable Markets

Features of High-Features of High-Velocity (Growing) Velocity (Growing)

MarketsMarkets

Features of High-Features of High-Velocity (Growing) Velocity (Growing)

MarketsMarkets Rapid-fire technological change

Short product life-cycles

Entry of important new rivals

Frequent launches ofnew competitive moves

Rapidly evolvingcustomer expectations

Page 7: Dynamic & Stable Markets

Fig. 8.1: Meeting the Challenge of High-Velocity ChangeFig. 8.1: Meeting the Challenge of High-Velocity ChangeFig. 8.1: Meeting the Challenge of High-Velocity ChangeFig. 8.1: Meeting the Challenge of High-Velocity Change

Page 8: Dynamic & Stable Markets

Strategy Options for Strategy Options for CompetingCompeting

in High-Velocity Markets in High-Velocity Markets

Strategy Options for Strategy Options for CompetingCompeting

in High-Velocity Markets in High-Velocity Markets Invest aggressively in R&D Develop quick response capabilities Use strategic partnerships to develop

specialized expertise and capabilities Initiate fresh actions every few months Keep products/services fresh and exciting

Page 9: Dynamic & Stable Markets

Industry Maturity: Industry Maturity: The Standout FeaturesThe Standout Features

Industry Maturity: Industry Maturity: The Standout FeaturesThe Standout Features

Slowing demand breeds stiffer competition More sophisticated buyers demand bargains Competitors emphasis on cost and service Difficult to create new product feature/s International competition increases Industry profitability falls Mergers and acquisitions reduce number of industry rivals

Page 10: Dynamic & Stable Markets

Strategy Options for Strategy Options for CompetingCompeting

in a Mature Industryin a Mature Industry

Strategy Options for Strategy Options for CompetingCompeting

in a Mature Industryin a Mature Industry

Prune marginal products and models

Emphasize innovation in the value chain

Strong focus on cost reduction

Increase sales to present customers

Purchase rivals at bargain prices

Expand internationally

Build new, more flexible competitive capabilities

Page 11: Dynamic & Stable Markets

Demand grows more slowly thaneconomy as whole (or even declines)

Competitive pressures intensify –rivals battle for market share

To grow and prosper, firm musttake market share from rivals

Industry consolidates to a smaller numberof key players via mergers and acquisitions

Stagnant or Declining Stagnant or Declining Industries:Industries:

The Standout FeaturesThe Standout Features

Stagnant or Declining Stagnant or Declining Industries:Industries:

The Standout FeaturesThe Standout Features

Page 12: Dynamic & Stable Markets

Strategy Options for Strategy Options for CompetingCompeting

in a Stagnant or Declining in a Stagnant or Declining IndustryIndustry

Strategy Options for Strategy Options for CompetingCompeting

in a Stagnant or Declining in a Stagnant or Declining IndustryIndustry

Pursue focus strategy aimed atfastest growing market segments

Stress differentiation based on qualityimprovement 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