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  • 1. Business level strategy Competitive strategy and industry environment Session 11
  • 2. Business level strategy
    • How to compete?
    • Generic business strategies
    • Choice of business strategy
    • Investment strategies
  • 3. Business level strategy
    • Cost Leadership
    • 5-Forces model (protected through low costs)
    • Disadvantages
      • Cost competition from competitors
      • Imitation
      • Focus exclusively on efficiency
  • 4. Business level strategy
    • Differentiation
    • 5-Forces model (protected through differentiation, brand loyalty)
    • Disadvantages
      • Need to maintain uniqueness
      • Imitation
      • Changes in consumer tastes and demands
  • 5. Business level strategy
    • Focus strategy
    • 5-Forces model (Protected by either low costs or differentiation)
    • Disadvantages
      • Smaller volumes, higher costs
      • Changes in technology or consumer taste
      • Competition from differentiators
  • 6. Business level strategy
    • Cost leadership and differentiation
      • Production and process technology
      • Flexible manufacturing systems
    • Stuck in the middle
      • Importance of FIT – capabilities and strategy
      • Align product/technology/market choices with strategy
  • 7. Investment strategy
    • Supports competitive strategy (FIT)
    • Cost of strategy
      • Resources required
    • Returns from strategy
      • Firm competitive position
      • Stage of industry life cycle
  • 8.
    • We don’t like their sound , and guitar
    • music is on the way out.
    • Decca Recording Co., rejecting the Beatles, 1962
  • 9. Investment Strategy
    • Strength of company competitive position
      • Market share
      • Distinctive competency
    • Industry life cycle
      • Opportunities
      • Threats
  • 10. Competitive Strategy & Industry Environment
    • Managing industry environment (FIT)
    • Fragmented Industries
    • Embryonic & Growth Industries
    • Mature Industries
    • Declining Industries
  • 11. Fragmented Industries
    • Characteristics
      • Many small/medium sized companies
      • Few economies of scale, High transport costs
    • Strategic Focus
      • Niche, customization
    • Consolidation Strategies
      • Chaining
      • Franchising
      • Horizontal Merger
  • 12. Embryonic & Growth Industries
    • Characteristics
      • Created by pioneers
      • Attract imitators
    • Strategic focus
      • Exploit innovation
    • Strategies
      • Go it alone
      • Enter into alliance
      • License innovation
  • 13. Mature Industries
    • Characteristics
      • Consolidated
      • Competitive interdependence
    • Strategic focus
      • Deter entry
      • Manage rivalry
      • Supply and distribution strategy
  • 14. Mature Industry
    • Deter entry
      • Product proliferation/ Filling niches
      • Price cutting
      • Maintaining excess capacity
    • Manage Rivalry
      • Price signaling
      • Price leadership
      • Product differentiation
      • Controlling industry capacity
        • Preemptive
        • Co-ordination
  • 15. Declining Industry
    • Characteristics
      • Falling demand
      • Intense competition
    • Strategic Focus
      • Dealing with decline
    • Strategies
      • Leadership
      • Niche
      • Harvest
      • Divestment