Professional Documents
Culture Documents
Chapter Outline
Competitive Strategies:
Michael Porters Generic Strategies:
Low-Cost Leadership Strategy.
Broad Differentiation Strategies.
Best-Cost Provider Strategies.
STRATEGIC MANAGEMENT
5-C
Offensive Strategies
Used to build new or stronger market position and/or
create competitive advantage.
Defensive Strategies
Used to protect competitive advantage
(rarely are they the basis for creating advantage)
STRATEGIC MANAGEMENT
OFFENSIVE STRATEGIES
Buildup Period
Benefit Period
Size of
competitive
advantage
achieved
Strategic moves
produce
competitive
advantage
Erosion Period
Moves by rivals
erode competitive
advantage
Time
Any competitive advantage currently held will eventually be eroded by the
actions of competent, resourceful competitors !
OFFEN
End-run offensives.
Preemptive strikes.
OFFEN
Objectives:
Attack on rivals competitive advantage.
Gain market share by out-matching strengths of weaker rivals.
Options:
Offer equally good product at a lower price.
OFFEN
Objective:
Concentrate company strengths & resources directly against a rivals
weaknesses.
Go after:
Those customers a rival has that it is least equipped to serve.
Rivals providing sub-par customer service.
Rivals with weaker marketing skills .
Geographic regions where rival is weak.
Segments rival is neglecting.
OFFEN
Objective:
Launch several major initiatives to:
Throw rivals off-balance.
Splinter their attention.
Force them to use substantial resources to defend their position.
A challenger with superior resources can overpower weaker rivals by outcompeting them across-the-board long enough to become a market leader.
OFFEN
End-Run Offensives
Dodge head-to-head confrontations that escalate competitive intensity or risk
cutthroat competition.
Attempt to maneuver around strong competitors concentrate on areas of market
where competition is weakest.
Options:
Introduce new products that redefine market & the terms of competition.
Build presence in geographic areas, where rivals have little presence.
Create new segments by introducing products with different features to better meet
buyer needs.
Guerrilla Offensives
Approach: Use principles of surprise and hit-and-run to attack in the locations and
at the times, where conditions are most favorable to the initiator.
Appeal: Well-suited to small challengers, with limited resources & market visibility.
Options:
Make random, scattered raids on leaders customers:
Occasional low-balling on price.
Intense bursts of promotional activity.
Special campaigns to attract buyers from rivals plagued with a strike or having
problems meeting delivery schedules.
Challenge rivals encountering problems with quality, meeting delivery times, or
providing adequate technical support.
File legal actions charging antitrust violations, patent infringements, or unfair
advertising.
OFFEN
Preemptive Strikes
Approach:
Involves moving first to secure an advantageous position that rivals are foreclosed or
discouraged from duplicating!
Options:
Acquire firm which has exclusive control of a valuable technology.
Secure exclusive/dominant access to best distributors.
Tie up best or most sources of essential raw materials.
Secure best geographic locations.
Obtain business of prestigious customers.
Expand capacity ahead of demand in hopes of discouraging rivals from following suit.
Build an image in buyers minds that is unique or hard to copy.
OFFEN
(End-Run)
(Weakness)
(Strength)
(Many Fronts)
OFFEN
OFFEN
Strategic offensive offering strongest basis for competitive advantage usually entail.
The chances for a successful offensive initiative are improved when it is based
on a companys resource strengths and strongest competencies and capabilities!
OFFEN
STRATEGIC MANAGEMENT
DEFENSIVE STRATEGIES
Defensive Strategy
Objectives:
Fortify firms present position.
Help sustain any competitive advantage held.
Lessen risk of being attacked.
Blunt impact of any attack that occurs.
Approaches:
Approach-1: Block avenues open to challengers.
Approach-2: Signal challengers that vigorous retaliation is likely.
DEFEN
DEFEN
STRATEGIC MANAGEMENT
First Movers
First Movers
Principle-1:
Being a first-mover holds potential for competitive
advantage in some cases but not in others.
Principle-2:
Being a fast follower can sometimes yield as good a
result as being a first mover.
Principle-3:
Being a late-mover may or may not be fatal -- it varies
FM