Business Strategy
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Details
Textbook:
Pages : 323;
Paperback;
210 X 275 mm approx.
Workbook:
Pages :
321; Paperback;
210 X 275 mm approx
Pricing
Textbook Price: Rs. 750 ;
Workbook Price: Rs. 700;
Available only in INDIA
Detail Table of Contents
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Generic Competitive Strategies : Chapter 7
SUMMARY: Generic competitive strategies enable a firm to outperform competitors in the industry. These strategies include overall cost leadership, differentiation, and focus. A firm following the cost leadership strategy needs to achieve the lowest cost of production per unit level in the industry. On the other hand, differentiation strategies are aimed at maintaining the exclusivity of the product so that the perceived difference in the product serves as a competitive advantage to the firm. Using focus strategies, the firm tries to capture a particular buyer group, segment of the product line, or geographic market. A firm should adopt and pursue any of the three generic strategies in an industry, and take care to avoid the pitfalls relating to the adoption of each generic strategy. One approach to overcoming such pitfalls is to create a strategic lock-in by achieving a proprietary position in the industry. |
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Industries in which firms operate can be classified into: fragmented industries; emerging industries; maturing industries; and declining industries. Fragmented industries are characterized by the absence of market leaders capable of shaping industry events. Strategy formulation in this type of industry involves an analytical framework that identifies the causes of fragmentation, and looks for ways to overcome them and benefit from consolidation in the industry.
Emerging industries are created by technological innovations, shifts in relative cost relationships, or the emergence of new consumer needs. Given the high level of uncertainty and risk and the lack of clarity in the rules of competition, formulating a strategy in this type of industry involves identifying early buyers or early adopters because early adopters influence the industry development, and the way in which industry designs, produces, delivers, and markets its product.
Industries reach the maturity stage when they pass from a period of rapid growth to one of slow growth or saturation. This period forces firms to move away from strategic experimentation and choose between difficult strategic choices.
Declining industries are characterized by a sustained, absolute decline in unit sales over a long period. These declines cannot be ascribed to a business cycle or other business uncertainties such as strikes. Strategies in declining industries can be classified into four categories: leadership, niche, harvest, and quick divestment.
