Term
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Definition
composed of a large number of small and medium sized companies
-low barriers to entry
- potential diseconomies of scale |
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Term
| strategies in fragmented industry |
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Definition
- chaining
- franchising
- horizontal merger |
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Term
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Definition
establish networks of linked merchandising outlets that are interconnected by IT so as to function as a large business entity
results in buying power |
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Term
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Definition
| consolidates industries. Allows company to obtain economies of scale or secure national market for product |
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Term
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Definition
- innovators
- early adopters
- early majority
- late majority
- laggards |
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Term
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Definition
| to cross, managers must successfully identify customer needs of the first wave of early majority users |
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Term
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Definition
-- embryonic stage investment strategy
business-level investment strategy that aims to build market share by developing a stable and distinct competitive advantage to attract customers with no knowledge of company products |
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Term
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Definition
-- growth stage investment strategy
maintain relative competitive position in a rapidly expanding market |
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Term
| share-increasing strategy |
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Definition
-- shakeout stage investment strategy
to attract customers from weak companies in existing market
weak companies must employ harvest strategy -> extract as much from inv as possible |
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Term
| hold-and-maintain strategy |
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Definition
-- mature stage investment strategy
expend resources to develop distinctive competency and remain a market leader |
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Term
| strategies to deter entry |
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Definition
- product proliferation
- price cutting
- maintaing excess capacity |
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Term
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Definition
| catering to needs of customers in all market segments to deter entry |
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Term
| strategies to manage rivalry |
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Definition
- price signaling: increase/decrease price to convey intentions to companies and influence how they price products
- price leadership: choosing most favorable pricing option
- nonprice competition |
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Term
| nonprice competitive strategies |
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Definition
1. market penetration
2. product development
3. market development
4. product proliferation |
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Term
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Definition
models competition between a company and its rivals
Basic Principles
- Look forward and reason back
- Know thy rival
- Find the dominant strategy (the one that makes you better off)
- Strategy shapes the payoff structure of the game |
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Term
| factors that determine competition in declining industries |
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Definition
- speed of decline
- height of exit barriers
- level of fixed costs
- commodity nature of product |
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Term
| strategy selection in declining industry |
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Definition
1. leadership - become dominant player
2. niche - focus on pockets of demand that are declining more slowly than industry
3. harvest - cuts investments, optimizes cash flow
4. divestment - sell of business |
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Term
| best investment strategy, depends on |
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Definition
(1) whether the industry is fragmented or consolidated,
(2) the stage of the industry life cycle |
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Term
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Definition
- product proliferation strategy
- price cutting strategy |
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