1. Business Strategies in Different Industry and Sectoral Contexts
Chapter 5
Business Strategies in Different Industry and Sectoral Contexts

2. Learning objectives
By the time you have completed this topic you will be able to:
recognize the different stages of industry development and understand the factors that drive the process of industry evolution;
identify the key success factors associated with industries at different stages of their development and the strategies appropriate to different stages in the industry life cycle;
appreciate the sources of organizational inertia and the challenges of managing strategic change and be familiar with different approaches to strategic change, including the use of scenario analysis and the quest for ambidexterity;
become familiar with the different approaches that firms have taken in developing organizational capabilities.
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3. Structure of the session
the industry life cycle,
managing organizational adaptation and strategic change,
managing strategic change.
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4. The industry life cycle
The two major forces that drive industry evolution are:
demand growth , and
the production and diffusion of knowledge.
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5. Product and process innovation over time
Once a dominant design emerges, the focus of innovation shifts from product innovation to process innovation.
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7. Innovation and renewal in the industry life cycle: U.S. retailing
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8. Industry structure and competition over the life cycle
Introduction
Growth
Maturity
Decline
Demand
Early adopters
Rapidly increasing market penetration
Replacement/ repeat buying; price sensitive customers
Obsolescence
Technology
Competing technologies; rapid product innovation
Standardization; rapid process innovation
Diffused know how; incremental innovation
Little innovation
Products
Wide variety of features & designs
Design & quality improve; dominant design emerges
Commoditization; brand differentiation
Differentiation difficult
Manufacturing & Distribution
Short-runs, skill intensive
Capacity shortage, mass- production
Over-capacity emerges; deskilling of production
Overcapacity
Trade
------Production shifts from advanced to developing countries
Competition
Few companies
Entry, mergers and exits
Shakeout & consolidation
Price wars & exits
Key Success Factors
Product innovation
Design for manufacture
Process innovation
Cost efficiency (scale economies, low cost inputs)
Low overheads; rationalization; buyer selection
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9. Managing Organizational Adaptation and Strategic Change
Why is change so difficult?
organizational routines
social and political structures
conformity
limited search – exploitation over exploration
complementaries between strategy, structure, and systems
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10. Coping with technological change
Is the technology competence enhancing or competence destroying?
a hybrid engine for a car does not require a major reconfiguration of car design and engineering
Is the technology an architectural or a component innovation?
A battery powered electric motor requires redesign of the entire car
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11. Disruptive technologies
Why do established firms find it so difficult to adapt to new technology?
New capabilities may be developed internally or through acquisition, but the main challenge is integrating resources into capabilities and aligning new capabilities with other aspects of the organization.
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12. Managing strategic change
dual strategies and organizational ambidexterity
positioning for the present and adapting to the future
Tools of strategic change management:
creating a perception of crisis,
establishing stretch targets,
creating organizational initiatives,
reorganization and new blood.
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13. CopyRIGHT
Copyright © 2015 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.