f.Strategic development 6

f.Strategic development 6 - low price and differentiation 4...

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Strategic Development Product Life Cycle (Revisited in ‘Product’) Bowman’s Competitive Strategy Options New Product Development (NPD)
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Five stages of the PLC Product development - sales are zero, investment costs are high Introduction - profits do not exist, heavy expense of product introduction Growth - rapid market acceptance and increasing profits Maturity - slowdown in sales growth. Profits level-off. Increase outlay to compete
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Decline - sales fall-off and profits drop
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PLC exercise The Ford Escort The Mini Cooper The Internet Phone Cadbury’s Fuse The Boeing 747 The Millennium Dome KIT KAT
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Source: Based on the work of Cliff Bowman. See C.Bowman and D.Faulkner. Competitive and Corporate Strategy, Irwin, 1996. Bowman’s Strategy Clock
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1 Low price/low added value Likely to be segment specific 2 Low price Risk of price war and low margins/need to be cost leader 3 Hybrid Low cost base and reinvestment in
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Unformatted text preview: low price and differentiation 4 Differentiation (a) Without price premium Perceived added value by user, yielding market share benefits (b) With price premium Perceived added value sufficient to bear price premium The Strategy Clock: Bowmans Competitive Strategy Options 5 Focused differentiation Perceived added value to a particular segment, warranting price premium 6 Increased price/standard Higher margins if competitors do not value follow/risk of losing market share 7 Increased price/low value Only feasible in monopoly situation 8 Low value/standard price Loss of market share New- Product Development Process New product strategy Idea generation Idea screening Concept development and testing Marketing strategy Business analysis Product development Test Marketing Commeration...
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This note was uploaded on 01/13/2012 for the course BUS M 201 taught by Professor Mcgregor during the Fall '11 term at BYU.

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f.Strategic development 6 - low price and differentiation 4...

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