1. Competitive Strategy and the Industry Environment
Chapter 6
Competitive Strategy and the Industry Environment

2. Life Cycle
Unit Sales
Profits

3. Life Cycle
Emerging
Embryonic
Introduction
Growth
Mature
Decline

4. Industry Life Cycle

5. Challenges of Emerging Industries
Uncertain market conditions and characteristics
Competing proprietary technologies and varied marketing/service/distribution tactics
Lack of complementary products
Limited/poor quality and high costs
Education of users
Innovators vs. Initial adopters
vs. Mass-market.

6. Alternatives in Emerging Industry
Move fast/early with superior product or technology
Track the Dominant Design
Build alliances 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.

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

8. Alternatives in Turbulence
Invest heavily in R&D, staying on the technological frontier
Develop the capability to be flexible
Maintain strategic partnerships
Build up lead-time advantages.

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

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

11. Alternatives in Fragmented Industries
Fragmented industries experience low entry barriers, lack of economies of scale, and high segmentation
Formula facilities -
Low cost operations -
Become the specialized vendor of choice -
Focus on a customer type -
Focus on a geographic segment -

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

13. 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.

14. Other Runner-up Strategies
Vacant Niche Strategy -
Specialists Strategy -
Superior Products Strategy -
Distinctive Image Strategy -
Content Follower –

15. Strategies to Deter Entry
Product Proliferation
Pricing Games
Maintaining Capacity

16. Strategies to Manage Rivalry
Price Signaling & Price Leadership
Non-Price Competition

17. Non-price Competition
Products
Existing
New
Market
Penetration
Product
Development
Existing
Marketing Segments
Market
Development
Product
Proliferation
New