Professional Documents
Culture Documents
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Tailoring Strategy
Chapter Title
to Fit Specific
Industry and
Company Situations
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Chapter Roadmap
u Strategies for Competing in Emerging Industries
u Strategies for Competing in Rapidly Growing Markets
u Strategies for Competing in Maturing Industries
u Strategies for Competing in Stagnant or Declining Industries
u Strategies for Competing in Turbulent, High-Velocity
Markets
u Strategies for Competing in Fragmented Industries
u Strategies for Sustaining Rapid Company Growth
u Strategies for Industry Leaders
u Strategies for Runner-up Firms
u Strategies for Weak and Crisis-Ridden Businesses
u Ten Commandments for Crafting Successful Business
Strategies
8-3
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Matching Strategy to
.d o .d o
c u-tr a c k c u-tr a c k
a Company’s Situation
Nature of industry
and competitive
Most important
conditions
drivers shaping a
firm’s strategic
options fall into Firm’s competitive
two categories capabilities,
market position,
best opportunities
8-4
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
in Emerging Industries
u Win early race for industry leadership by employing a bold,
creative strategy
u Push hard to perfect technology, improve product quality,
and develop attractive performance features
u Consider merging with or acquiring another firm to
è Gain added expertise
è Pool resource strengths
u When technological uncertainty clears and a dominant
technology emerges, try to capture any first-mover
advantages by moving quickly
u Form strategic alliances with
è Companies having related technological expertise or
è Key suppliers
8-6
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
8-7
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
in Emerging Industries
u Raising capital to finance initial operations until
è Sales and revenues take off
è Profits appear
è Cash flows turn positive
u Developing a strategy to ride the wave of industry
growth
è What market segments to pursue
è What competitive advantages to go after
u Managing the rapid expansion of facilities and sales to
position a company to contend for industry leadership
u Defending against competitors trying to horn in on the
company’s success
8-8
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-9
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
in a Mature Industry
u Prune marginal products and models
u Expand internationally
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
End-Game Strategies
.d o .d o
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
u Frequentlaunches of
new competitive moves
u Rapidlyevolving
customer expectations
8-18
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
Fig. 8.1: Meeting the Challenge of High-Velocity Change
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-19
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
in High-Velocity Markets
u Invest aggressively in R&D
u Initiate fresh actions every few months
u Develop quick response capabilities
è Shift resources
è Adapt competencies
è Create new competitive capabilities
è Speed new products to market
u Use strategic partnerships to develop
specialized expertise and capabilities
u Keep products/services fresh and exciting
8-20
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
u Innovativeness
u Opportunism
u Resource flexibility
u First-to-market capabilities
8-21
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Competitive Features
.d o .d o
c u-tr a c k c u-tr a c k
of a Fragmented Industry
u Absence of market leaders with large market shares or widespread
buyer recognition
u Product/service is delivered to neighborhood
locations to be convenient to local residents
u Buyer demand is so diverse that many firms
are required to satisfy buyer needs
u Low entry barriers
u Absence of scale economies
u Market for industry’s product/service may be globalizing, thus
putting many companies across the world in same market arena
u Exploding technologies force firms to specialize just to keep up in
their area of expertise
u Industry is young and crowded with aspiring contenders, with no
firm having yet developed recognition to command a large market
share
8-22
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Book publishing
Landscaping and plant nurseries
Auto repair
Restaurant industry
Public accounting
Women’ s dresses
Meat packing
Paperboard boxes
Hotels and motels
Furniture
8-23
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-25
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-26
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-27
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
Fig. 8.2: Three Strategy Horizons for Sustaining Rapid Growth
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-28
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Risks of Pursuing
.d o .d o
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Strategies Based on a
.d o .d o
c u-tr a c k c u-tr a c k
u Industry leaders
u Runner-up firms
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Industry Leaders:
.d o .d o
c u-tr a c k c u-tr a c k
u Well-known reputation
u Proven strategy
u Key
strategic concern –How to sustain
dominant leadership position
8-31
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Stay-on-the-offensive strategy
Fortify-and-defend strategy
Muscle-flexing strategy
8-32
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Stay-on-the-Offensive Strategies
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Fortify-and-Defend Strategy
Objectives
8-35
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Fortify-and-Defend Strategy:
.d o .d o
c u-tr a c k c u-tr a c k
Strategic Options
u Increase advertising and R&D
u Provide higher levels of customer service
u Introduce more brands to match attributes of rivals
u Add personalized services to boost buyer loyalty
u Keep prices reasonable and quality attractive
u Build new capacity ahead of market demand
u Invest enough to remain cost competitive
u Patent feasible alternative technologies
u Sign exclusive contracts with best suppliers and
distributors
8-36
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Muscle-Flexing Strategy
Objectives
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Muscle-Flexing Strategy:
.d o .d o
c u-tr a c k c u-tr a c k
Strategic Options
u Be quick to meet price cuts of rivals
u Counter with large-scale promotional campaigns if
rivals boost advertising
u Offer better deals to rivals’major customers
u Dissuade distributors from carrying rivals’products
u Provide
salespersons with documentation about
weaknesses of competing products
u Make attractive offers to key executives of rivals
u Use arm-twisting tactics to pressure present
customers not to use rivals’products
8-38
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Muscle-Flexing Strategy
Risks
8-39
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
u Market challengers
è Use offensive strategies to gain market share
u Focusers I’m
trying!
è Concentrate on serving a
limited portion of market
u Perennial runners-up
è Lack competitive strength to do
more than continue in trailing position
8-40
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Obstacles Runner-Up
.d o .d o
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Strategic Options
.d o .d o
c u-tr a c k c u-tr a c k
8-42
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-44
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
2. Specialist strategy
8-45
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
è Growth potential
è Well-suited to a firm’
s capabilities
8-46
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
u Strategy concentrated on
being a leader based on
è Specific technology
è Product uniqueness
è Expertise in
n Special-purpose products
n Specialized know-how
8-47
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
u Approaches
è Fine craftsmanship
è Prestige quality
è Frequent product innovations
è Close contact with customers to
gain input for better quality product
8-48
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-51
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Achieving a Turnaround:
.d o .d o
c u-tr a c k c u-tr a c k
u Cut costs
u Combination of efforts
8-52
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
u Objectives
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
Strategy Be Considered?
u Industry’
s long-term prospects are unattractive
u Building up business would be too costly
u Market share is increasingly costly to maintain
u Reduced levels of competitive effort will not trigger
immediate fall-off in sales
u Firm can re-deploy freed-up resources
in higher opportunity areas
u Business is not a major component of
diversified firm’s portfolio of businesses
8-55
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
Liquidation Strategy
8-56
H H
F-XC A N GE F-XC A N GE
PD PD
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.c .c
!
W
W
O
O
N
N
y
y
bu
bu
to
to
k
k
lic
lic
C
C
w
w
m
m
w w
w
w
o
o
.d o .c .d o .c
c u-tr a c k c u-tr a c k
8-60