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Strategy Industry Contingencies

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May provide experience curve cost savings. Most consumers are first-time buyer ... Restaurant, motel, auto repair, Furniture. Strategies for A Fragmented Industry ... – PowerPoint PPT presentation

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Title: Strategy Industry Contingencies


1
  • Strategy Industry Contingencies

Sanjib Chowdhury, Ph.D.
2
Industry Strategy Contingency
  • Emerging Industries
  • Characteristics of an Emerging Industry
  • Strategies for an Emerging Industry
  • Fast growth Industries
  • Characteristics of a fast growth industry
  • Strategies for a fast growth industry
  • Maturing Industries
  • Characteristics of a maturing industry
  • Strategies for a maturing industry
  • Declining Industries
  • Characteristics of a declining industry
  • Strategies for a declining industry
  • Fragmented Industries
  • Characteristics of a fragmented industries
  • Strategies for a fragmented industry

3
Emerging Industry
  • Most companies are in start up mode
  • Proprietary technology
  • Many competing technology
  • New and unproven market
  • Low barrier to entry
  • May provide experience curve cost savings
  • Most consumers are first-time buyer
  • Investment problem

4
Strategies for an Emerging Industry
  • Early mover advantage
  • Bold strategy (high risk)
  • Improve product quality and performance to
    achieve market dominance
  • Try to create the dominant technology
  • Find the right market segment
  • Setup strategic relationships with key suppliers
    and distributors

5
Fast Growth Industry
  • Short product life cycle
  • Fast technological change
  • Evolving customer preferences expectations
  • Rapidly changing competitive moves

6
Strategies for A Fast Growth Industry
  • Develop knowledge expertise
  • High investment in RD
  • Collaboration to develop expertise
  • Develop flexibility and speed
  • Quick response to customer preference changes
    in the industry
  • Fast product development
  • Fast new product introduction to market

7
Mature Industry
  • Declining industry profitability
  • Declining industry Sales growth
  • Competition intensifies
  • Sophisticated buyers
  • Very few new customers
  • Most are repeat customers
  • Increased mergers acquisitions
  • Increased international competition

8
Strategy for A Mature Industry
  • Preserve profit by increasing efficiency
  • Reduce product variety
  • Simplify product design
  • Process innovation (increase production
    efficiency)
  • Purchase competitors at a low price
  • Compete internationally

9
Declining Industries
  • Industry growth is slower than the general
    economy
  • Sometimes no growth or even decline in demand
  • Intense competition
  • Hard to maintain market share
  • In order to grow or maintain the current level of
    sales, the firm must acquire rivals market share

10
Strategy for Declining Industry
  • Stay in the same industry and focus on the still
    growing market segments
  • Stay in the same industry and aggressively cut
    cost
  • Reduce cost by increasing efficiency
  • Eliminate under utilized operations
  • Reduce assets
  • Find ways to exit
  • Reduce exit barrier by outsourcing activities

11
Fragmented Industries
  • Individual buyer buys small volume
  • Buyers need are diverse
  • Absence of economies of scale
  • Low entry barrier
  • Big and diverse market
  • No one has a large market share
  • Examples
  • Restaurant, motel, auto repair, Furniture

12
Strategies for A Fragmented Industry
  • Focus on customizing products
  • Focus on specific customers
  • Focus on specific geographic location
  • Focus on reducing cost
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