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

3. Life Cycle Unit Sales Profits

4. Life Cycle Emerging Embryonic Introduction Growth MatureDecline

5. Industry Life Cycle

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

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

13. High Technology Industries Battle over technical standard, format, and dominant design Battle over technical standard, format, and dominant design Set by decree, cooperation, public domain, but mostly through consumer choices Set by decree, cooperation, public domain, but mostly through consumer choices

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

15. TV Industry – Paradigm Shifts Black & White TV

16. Color TV

17. Black & White TV Color TV

18. Black & White TV Color TV Big Screen TV

19. Black & White TV Color TV Big Screen TV

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

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

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

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

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

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

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