TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY AND COMPANY SITUATIONS

1
CHAPTER 8

• TAILORING STRATEGY TO FIT SPECIFIC INDUSTRY
  AND COMPANY SITUATIONS

2
Outline

• Strategies for Emerging Industries
• Strategies for Turbulent, High Velocity Markets
• Strategies for Maturing Industries
• Strategies for Declining Industries
• Strategies for Fragmented Industries
• Strategies for Sustaining Rapid Growth
• Strategies for Industry Leaders
• Strategies for Runner-up Firms
• Strategies for Weak Businesses

3
Overview Matching Strategyto a Companys
Situation
Most important drivers shaping a firms strategic
options fall into two categories
4
Emerging Industries

• Critical Strategic Issues
• .
• .

5
Strategy Options for Competing in Emerging
Industries

• Be bold
• Focus on technology, quality, performance
  features
• Quickly adopt dominant technology
• Form strategic alliances
• Capture first-mover advantages
• Pursue new customers, applications and geographic
  areas
• Use focused advertising
• Use price cuts to attract price sensitive
  customers

6
High Velocity Markets

• Critical Strategic Issue
• .

7
Meeting the Challengeof High-Velocity Change
Source Adapted from Shona L. Brown and Kathleen
M. Eisenhardt, Competing on the Edge Strategy
as Structured Chaos (Boston, MA Harvard
Business School Press, 1998) p. 5.
8
Strategy Options for Competingin High
Velocity Markets

• Aggressive RD
• Quick response capabilities
• Use strategic partnerships
• Initiate fresh actions (decisions and products)

9
Maturing Industries

• Critical Strategic Issues
• .

10
Strategy Options for Competingin a Mature
Industry

• Prune marginal products and models
• Innovative value chain
• Cost reduction focus
• Increase sales to present customers
• Purchase rivals
• Expand internationally
• Increase flexible competitive capabilities

11
Declining/Stagnant Industries

• Critical Strategic Issues
• .

12
Strategy Options for Competingin a Stagnant
or Declining Industry

• Pursue focus strategy
• Stress differentiation
• Drive costs down

13
Fragmented Industries

• Critical Strategic Issues
• .

14
Strategy Options for Competing in a Fragmented
Industry

• Operate formula facilities
• Be a low-cost operator
• Specialize by product type
• Specialize by customer type
• Limited geographic area

15
Sustaining Rapid Company Growth

• Critical Strategic Issue
• .

16
Strategies for Sustaining Rapid Growth

• Companies desirous of growing revenues and
  earnings rapidly year-after-year have to have a
  portfolio of strategies
• Horizon 1 Strategic initiatives to fortify and
  extend their position in existing businesses
• Horizon 2 Strategic initiatives to leverage
  existing resources and capabilities by entering
  new businesses with promising growth potential
• Horizon 3 Strategic initiatives to plant new
  seeds for venturing into businesses that are just
  emerging or do not even exist yet

17
Industry Leaders

• Critical Strategic Issue
• .

18
Strategy Options for Industry leaders

• Offensive
• Defensive
• Muscle-flexing

19
Runner-Up Firms

• Critical Strategic Issue
• .

20
Strategies of Runner-up Firms

• Market challengers
• .
• Focusers
• .
• Perennial runners-up
• .

21
Weak/Crisis-Ridden Businesses

• Critical Strategic Issue
• .

22
Strategy Options for Weak/Crisis-Ridden Businesses

• Offensive turnaround
• Fortify-and-defend
• Immediate abandonment
• End-game