1. Tailoring Strategies to Fit Specific Industry and Company Situations
Chapter 8
Tailoring Strategies to Fit Specific Industry and Company Situations

2. Life Cycle
Unit Sales
Profits

3. Life Cycle
Emerging
Embryonic
Introduction
Growth
Mature
Decline

4. Industry Life Cycle

5. Industry Life Cycle

6. Industry Life Cycle

7. Industry Life Cycle

8. Industry Life Cycle

9. Industry Life Cycle

10. Challenges of Emerging Industries
Uncertain market conditions and characteristics
Competing/unknown proprietary technologies and varied marketing/service/distribution tactics
Lack of complementary products
Limited/poor quality and high costs, which deter acceptance
Low entry barriers
Education of users
Innovators vs. Initial adopters
vs. Mass-market.

11. Alternatives in Emerging Industry
Move fast/early with superior product or technology
Track the Dominant Design
Build alliances/merge with key suppliers or those that provide complementary products to out position rivals
Seek new customer groups, new applications for your product
Make it cheap/easy for early adopters to try/buy your product.

12. High Technology Industries
Rapidly changing scientific knowledge underlying attribute for competition
R&D/Sales
Battle over technical standard, format, and dominant design
Set by decree, cooperation, public domain, but mostly through consumer choices

13. Benefits for Standards
Compatibility
Reduce consumer uncertainty
Reduce production costs
Increase in complementary products – Network effects – which greatly enhances sustainability
Lock outs and switching costs

14. Winning Format Wars Ensure complementary products Killer applications
Razor and blade strategy
Cell phones, printers, satellite TV/radio, video games
Cooperative competition
Licensing

15. TV Industry – Paradigm Shifts
Black & White TV

16. Color TV
Black & White TV

17. Color TV
Black & White TV

18. Big Screen TV
Color TV
Black & White TV

19. Big Screen TV
Color TV
Black & White TV

20. HDTV
Big Screen TV
Color TV
Black & White TV

21. HDTV
Incremental evolution included remote controls,cable ready tuners, stereo sound systems, screen-in-a-screen, etc
Big Screen TV
Color TV
Black & White TV

22. Challenges of Growth Environments
Rapid technological changes
Short product life-cycles
Many new entrants and strategies
Changing customer demands/preferences.

23. Alternatives in Growth Environments
Drive down costs through scale
Invest heavily in product R&D to differentiate, staying on the technological frontier
Expand distribution and geographic coverage
Expand product line to appeal to new customers

24. Challenges of Mature Industries
Slow growth fight for market share
Sophisticated buyers
Costs, prices and service critical
Excess capacity and oversupply
Innovation and new uses more difficult
International competition
Falling profitability
Consolidation
Segmentation.

25. Alternatives in Mature Industries
Prune product line
Process innovation & cost reductions in value chain
Sell more to current buyers
Purchase rivals at low prices
Go international.

26. Fragmented Industries
Low entry barriers
Lack of economies of scale
High segmentation
Local Advantages
Diverse preferences

27. Alternatives in Fragmented Industries
Formula facilities - Tri-Con, Home Depot
Low cost operations - tires, pool suppliers
Become the specialized vendor of choice - oil change, lawn/garden, bar stools
Focus on a customer type - Hooters, Panera
Focus on a geographic segment - Winn-Dixie, Chic-fil-a, Sonic.

28. Problems for Runner-ups
Lower economies of scale
Lack of recognition
Limited exposure in mass media
Capital limitations.

29. Alternatives for Runner-ups in Scale Sensitive Industries
Use lower price points
Merge/acquire rivals to increase market share
Invest in cost-saving techniques
Pursue radical innovation to change the rules of the game.

30. Other Runner-up Strategies
Vacant Niche Strategy - commuter airline, health foods, religious book stores
Specialists Strategy - Arm & Hammer
Superior Products Strategy - Sub-Zero
Distinctive Image Strategy - Rainforest Cafe
Content Follower – Cadbury-Schweppes