Post on 03-May-2017
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Competitive Strategies
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Competitive StrategyConsists of a company’s market initiatives and business approaches to Attract and please customers Withstand competitive pressures Strengthen market position
Includes offensive and defensive moves to Counter actions of key rivals Shift resources to improve long-term
market position Respond to prevailing market conditions
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Objectives of Competitive Strategy
Build a competitive advantage
Gain loyal customers
Out perform rivals, ethically and honorably
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Types of Competitive Strategy: Porter’s generic strategies
Market ScopeBroad or NarrowCompetitive advantageLow cost or differentiatedIntegrated differentiated / low cost
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Low-Cost Leadership
Focus on being low-cost relative to rivals
Low overall costs -- not just low manufacturing or production costs.
Need to control and bypass Costs
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Differentiation StrategiesThe objective
For success
How to sustain
Achieving Advantage
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Best Cost Provider Strategies
Emphasis on low-cost and differentiation
The objective
Competitive Strength
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Focus / Niche StrategiesConcentrate on a narrow piece of the market
The objective
Two Approaches Low Cost Differentiation
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Types of growth strategies:Miles and Snow typology
ProspectorSeeks innovationSurvey dynamic environment and
develops new productsCompetitors are uncertain about
prospector’s future decisions and actions
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Types of growth strategies: Miles and Snow typology
Defender Searches for market stability Limited product line Seeks to defend position Prevents others from entering its
turf Can create and maintain niches
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Types of growth strategies: Miles and Snow typology
AnalyzerStrategy of analysis and imitationCopies promising new activitiesReactorLacks a strategic planReacts to environmental changesMakes adjustments when forced toUnable to respond quickly to changes
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Additional Strategic Actions
Cooperative Merger & AcquisitionVertical IntegrationUnbundling/OutsourcingOffensive StrategiesDefensive Strategies
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Cooperative Strategies Strategic Alliances or Collaborative Partnerships
Used to Complement their own strategic
initiatives Strengthen competitiveness
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Merger - Combination and pooling of equals, with newly created firm often taking on a new name
Acquisition - One firm, the acquirer, purchases and absorbs operations of another, the acquired
Merger and Acquisition Strategies
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Vertical Integration StrategiesVertical integration Backward Forward
Amount of integration Full Partial
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Unbundling and Outsourcing Strategies
De-Integration or unbundling involves Narrowing the scope of the firm’s
operations Focusing on performing certain
“core” value chain activities Relying on outsiders to perform the
remaining value chain activities
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Using the Internet
Disseminate Product InformationMinor Distribution ChannelBrick-and-Click StrategiesOnline Enterprises
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Offensive and Defensive Strategies
*Offensive Strategies are Used to build new or stronger market position
and/or create competitive advantage
*Defensive Strategies are Used to protect competitive advantage (rarely
are they the basis for creating advantage)
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Offensive Strategies: Options1. Initiatives to match or exceed competitor
strengths2. Initiatives to capitalize on competitor
weaknesses3. Simultaneous initiatives on many fronts4. End-run offensives5. Guerrilla warfare tactics6. Preemptive strikes
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Offensive Strategies: Choosing Who to Attack
Four types of firms can be the target of a fresh offensive Market leaders Runner-up firms Struggling rivals on verge
of going under Small local or regional
firms not doing a good jobfor their customers
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Defensive Strategies
Objectives
Approaches
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Timing and Competitive Advantage
First Mover
Fast Follower
Late Mover