1. LECTURE 7 Tailoring Strategy to Fit Specific Industry and Company Situation
M Akbar Ali bpm ppm
DIG, Bangladesh Police
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2. Lecture 7
“Competing in the marketplace is like war. You have injuries and casualties, and the best strategy wins.”
-- John Collins

3. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
This lecture looks at the strategy making task in nine commonly encountered situations:
1. Companies competing in Emerging Industries of the future
2. Companies competing in Turbulent, High-velocity markets
3. Companies competing in Mature, Slow-growth industries
Lecture 7 Strategic Management

4. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
4. Companies competing in Stagnant or Declining industries
5. Companies competing in Fragmented Industries
6. Companies pursuing Rapid Growth
7. Companies in Industry Leadership Positions
8. Companies in Runner-up Positions
9. Companies in Competitively Weak Positions or plagued by crisis conditions.
Lecture 7 Strategic Management

5. Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Aim:
To give strong appreciation of the importance of customizing a company’s strategy
To provide better idea as to how to weigh the various external and internal considerations and balance the pros and cons of the various strategic options that are open to a company.

6. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Companies competing in Emerging Industries of the Future
Strategic Avenues:
1. Try to win the early race for industry leadership with risk-taking entrepreneurship, and a bold, creative strategy.
2. Push to perfect the technology, to improve product quality, and develop additional attractive performance features
3. As a dominant technology emerges, adopt it quickly.
Lecture 7 Strategic Management

7. 6. Try to capture any early mover advantages
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
4. Form strategic alliances with key suppliers to gain access to specialized skills, technological capabilities, and critical material or components.
5. Acquire or form alliances with companies that have related or complementary technological expertise.
6. Try to capture any early mover advantages
7. Pursue new customer group, new geographic areas
8. Make it easy and cheap for first time buyers to try the industry’s first generation product.
9. Use price cuts to attract the next layer of price-sensitive buyers.

8. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for Competing in Turbulent, High-velocity Markets
A company can assume any of the three strategic postures in dealing with high-velocity change: (See Figure 8.1)
React to Change
Anticipate Change
Lead Change
(Cont’d on slide 8)
Lecture 7 Strategic Management

9. Lecture 7 Figure 8.1 Managing the Challenge of High-Velocity Change
Defensive
Introduce better products in
Response to new offerings
Of rivals.
Respond to unexpected
Changes in buyer need and
Preferences
Adjust to new government
policies
React and respond
As needed.
Defend and protect
the company’s
Positions.
Reacting To
Change
Plan ahead for
expected future changes
add/adapt resources and competitive capabilities
Improve product line
- Strengthen distribution
Anticipating
Change
Analyze the prospects for
Market globalization
Research buyer needs,
Preferences, and expectations
Monitor new technological
Development closely to
Predict future path.
Leading
Change
Seize the offensive
Be the agents of
Industry changes;
set the pace
Influence the rules
of the game
Force rivals to follow.
Pioneer new and better
Technologies
Introduce innovative products
That open new markets and
Spur the condition of whole
New industries.
Seek to set industry standards
Lecture 7 Strategic Management
Offensive

10. Strategies for Competing in Turbulent, High-velocity Markets (Cont’d from slide 6)
The following strategic moves may offer best payoffs:
Invest aggressively on the R&D to stay on the leading edge of technological know how
Develop and maintain the organizational capability to respond quickly to the moves of the rivals and surprising new developments.
Rely on strategic partnerships with outside suppliers and with companies making tie-in products.
Initial fresh actions every few months, not just when a competitive response is needed.
Keep the company’s products and services fresh and exciting enough to stand out in the midst of all the changes

11. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for Competing in Maturing Industries
A Maturing industry is one that is moving from rapid growth to significantly slower growth. Characteristics:
1. Slowing growth in buyer demand generates more head-to-head competition for market share
2. Buyers become more sophisticated, often driving a harder bargain on repeat purchase
3. Competition often produces a greater emphasis on cost and service
(Cont’d on Slide 10)
Lecture 7 Strategic Management

12. 4. Firms have a ‘topping-out’ problem in adding a new facilities
(Cont’d from slide 9)
4. Firms have a ‘topping-out’ problem in adding a new facilities
5. Product innovation and new end-use applications are harder to come by
6. International competition increases
7. Industry profitability falls temporarily or permanently
8. A number of merger and acquisition takes place

13. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategic Moves in Maturing Industries:
Pruning marginal Products and Model
More Emphasis on Value Chain Innovation
A Strong Focus on Cost Reduction
Increasing Sales to Present Customers
Purchasing Rival Firms at Bargain Prices
Expanding Internationally
Building New or More Flexible Capabilities.
Lecture 7 Strategic Management

14. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for Firms in Stagnant or Declining Industries
For Competitive Advantage, needs one of the three strategic themes:
Pursue a focused strategy aimed at faster-growing market segments within the industry
Stress differentiation based on quality improvement and product innovation.
Strive to drive costs down and become the industries low-cost leader.
Lecture 7 Strategic Management

15. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for Competing in Fragmented Industries
Hundreds even thousands of small and medium-sized companies, many privately held and none with a substantial share of total industry sales.
Hotel, auto repair, apparels, gasoline etc
Lecture 7 Strategic Management

16. Reasons why Fragmented;
Extensive and diverse market demand eg, hotel and restaurant in NY, London or Tokyo.
Low entry barriers
Absence of scale economies
Customized product : Interior design, kitchen cabinet, ads
Product or service is becoming global in the same competitive market arena.
Technologies in the value chain are exploding
The industry is young with no firms having yet developed the resource base, competitive capabilities and achieve significant market share.

17. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Suitable competitive strategy options include
Constructing and operating “formula” facilities
Becoming a low-cost provider
Specializing by product type
Specializing by customer type
Focusing on a limited geographic area
Lecture 7 Strategic Management

18. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for sustainable Rapid Company Growth
Strategic Initiatives to craft covering three horizons
Horizon 1:
Strategic initiatives to fortify and extend their position in existing business
Horizon 2:
Strategic initiatives to leverage existing resources and capabilities by entering new businesses with promising growth potential
Horizon 3:
Strategic initiatives to plant the seeds for ventures in businesses that do not yet exist.
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19. Lecture 7 Strategic Management
Lecture 7 Figure 8.2: The Strategic Horizons for Sustaining Rapid Growth
Portfolio of
Strategy
Initiatives
Strategy
Horizon 3
Strategy Horizon 2
“Long-jump”
Initiatives to sow the
Seeds for growth in
Businesses of the
Future.
Minimal revenue
gains now and likely
losses, but potential for
Significant contributions
To revenues and
Profits in 5-10 years.
“Medium-Jump”
Initiatives to leverage
Existing resources and
Capabilities to pursue
Growth in new
Businesses
Moderate revenues
And profit gains now,
But foundation laid for
Sizable gains over
next 2-5 years
Strategy Horizon 1
“Short-Jump”
Initiatives to fortify and
Extend current business
Immediate gains in
Revenues and profits
Time
Lecture 7 Strategic Management

20. Strategies for Industry Leaders
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for Industry Leaders
“Stronger than average to powerful”
Well-known
Leader in Low-cost or Differentiation
Some Industry Leaders:
Microsoft in computer software
McDonald’s in fast food
Gillette in razor blades
Wal-Mart in discount retailing
Eastman Kodak in camera film
Levi in jeans

21. Stay-on-the-offensive Strategy Fortify-and-defend Strategy
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Three contrasting strategic postures are open to industry leaders and dominant firms;
Stay-on-the-offensive Strategy
Fortify-and-defend Strategy
Muscle-flexing Strategy

22. Strategy for Runner-up Firms
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategy for Runner-up Firms
Offensive strategies to Build Market Share
Growth-via-acquisition Strategy
Vacant-Niche Strategy
Specialist Strategy
Superior Product Strategy
Distinctive image Strategy
Content Follower Strategy

23. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
Strategies for Weak and Crisis-Ridden Businesses
Four Basic Strategic Options:
1. Turnaround Strategies for Businesses in Crisis. Turnaround can involve any of the following actions:
Selling of assets to raise cash to save the part of the business
Revising the existing strategy
Launching efforts to boast revenues
Pursuing cost reduction
Using a combination of these efforts.
2. Fortifying and defend Strategy
3. Liquidation
4. End-game Strategy
Lecture 7 Strategic Management

24. Lecture 7 Strategic Management
Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
10 Commandments for Crafting Successful Business Strategies
1. Place top priority on crafting and executing strategic moves that enhance the company’s competitive position for the long run
2. Be prompt in adapting to changing market conditions, unmet customer needs, buyer wishes for something better, emerging technical alternatives, and new initiatives of competitors.
3. Invest in creating a sustainable competitive advantage
4. Avoid strategies capable of succeeding only in the optimistic circumstances.
Lecture 7 Strategic Management

25. Lecture 7 Tailoring Strategy to Fit Specific Industry and Company Situations
5. Don’t underestimate the reactions and the commitments of rival firms
6. Consider that attacking competitive weakness is usually more profitable and less risky than attacking competitive strength.
7. Be judicious in cutting prices without an established cost advantage.
8. Strive to open up very meaningful gaps in quality or service or performance features when pursuing a differentiation strategy,
9. Avoid “struck in the middle” strategies that represents compromises between lower costs and greater differentiation and between broad and narrow market appeal.
10. Be aware that aggressive moves to wrest market share away from rivals often provoke retaliation in the form of a marketing “arms race” or a price war– to the detriment of everyone’s profit.