Chapter Eight - Chapter Eight Matching Strategy to a...

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Chapter Eight Matching Strategy to a Company’s Situation Matching Strategy to the Situation 1. The most important drivers shaping a company’s strategic options fall into two broad categories: The nature of industry and competitive conditions; The firm’s own resources, competitive capabilities, market position, and best opportunities. I. Strategies Based on Life Cycle of Industries Competing in Emerging Industries 2. Characteristics of a young, emerging industry: No rules of the game => no established competition patterns; New product/service => No standard product line ; Unproven Market => wide difference in product quality and performance; Entry barriers are low => lots of competitions possible; Firms hold close information => little sharing; Possible shortage of supplies of raw materials; 3. Why marketing significant? Explain what product/service is (Buyers are first time users); Why consumers need it (induce them to buy); Search new customer groups; 4. The critical strategic issues confronting firms in a young, emerging industry include a. How to finance the start-up phase and get through several lean years until the product catches on. b. How to successfully implement a best-cost producer strategy. c. Whether to use a differentiation strategy of a market niche strategy. d. How many core competencies to try to build and nurture. 5. Which of the following is not a common characteristic of emerging industry? a. Global competition and increasing vertical integration. b. Many potential buyers expect first-generation products to be rapidly improved and delay their purchase until technology and product design mature. c. How to induce first-time purchase and overcome customer concerns about product features, performance reliability, and conflicting claims of rival firms. d. A situation where there is no consensus about which of several competing technologies will win out and/or which product features will gain the most buyer favor. Competing in High Velocity Industry (Growth Stage) 6. A high velocity industry environment is characterized by Rapid-fire technological change; Short product life-cycles; Frequent launches of fresh competitive moves by industry members; Quickly evolving customer needs and expectations.
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7. Competitive success in high velocity industries tends to hinge on building such elements into a company’s strategy as Developing the org’l capability to respond quickly to important new industry events and conditions (org’l agility is a huge competitive asset => org’l structure be such that firm can respond quickly to important new events). Relying on strategic partnerships with outside suppliers and with companies making tie-in products to perform value chain activities where they have specialized expertise and capabilities. Investing aggressively (emphasis on R&D) to stay on the leading edge of technological know-
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Chapter Eight - Chapter Eight Matching Strategy to a...

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