Test 2 slides - CompetitiveStrategy Mutualinterdependence

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Competitive Strategy
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Mutual interdependence “Counting on your competitors to be slow and stupid for a long time  is a heck of a way to build a business model.” S. Finkelstein Strategic competitiveness and above-average returns  result only when companies recognize that their  strategies are not implemented in isolation from their  competitors’ actions and responses. market entry Wal-Mart (pricing, local monopoly) ING Bank of Canada (how will bricks and mortar banks react)
Background image of page 2
Game-theoretical thinking What are our payoffs (profits) in relation to the  alternative actions the competitor could take? What prior strategic commitments  has the  competitor made? Does the potential market fit  with the  competitor’s existing strategy? How “reversible” is your action or the  competitor’s potential response?
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Sources of First Mover  Advantages First movers allocate funds for innovation, aggressive  Economies of Scale 1 st  to market can achieve higher volumes and spread fixed  costs over larger volume and achieve a low cost structure VW in China: 53% of the market in 2000. Experience or Learning Curve Effects (if proprietary) Toyota-Hybrid cars – Licensed it to Nissan and Ford Brand loyalty-reputation (e.g., Am azon) Network effects -- Setting technological standards Developing favorable links with suppliers or  distributors Coke-international markets
Background image of page 4
Sources of Second Mover  Advantages A firms that responds to a first mover’s  competitive action Avoid costs of early adoption Japanese car makers in the U.S. (non-unionized) Saturn (clean sheet approach) Dell (bypassed the channels) Learn from market’s reaction to the first mover Changing technology
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Network Effects Establishing a technological standard Linked to  market share availability of the product (distribution channels) availability of co-specialized products Matsushita’s VHS vs. Sony’s Beta (availability of  tapes) IBM PCs vs. Apple (availability of parts, software,  and compatibility)  Internet Explorer vs. Netscape (bundling,  monopoly power)
Background image of page 6
Kindle – Network Effects Why is Amazon selling some best-seller e-books at  a loss (e.g., at $7.99)?  -- exciter Why is Kindle so much cheaper than other e- readers? Developing 
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/22/2011 for the course MGMT 478 taught by Professor May during the Spring '11 term at South Carolina.

Page1 / 62

Test 2 slides - CompetitiveStrategy Mutualinterdependence

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online