Session 6

STRENGTHENING A
COMPANYS
COMPETITIVE POSITION

POKOK BAHASAN
Penguatan Posisi Kompetitif: langkah,
stratejik, waktu serta lingkup
operasi.
1. Pemilihan strategejik untuk
meningkatkan posisi pasar (stratejik
ofensif)
2. Melingdungi posisi pasar dan keunggulan
kompetitif (stratejik defensif)
3. Waktu penentuan stratejik ofensif dan
defensif
4. Memperkuat posisi pasar melalui lingkup
operasi
5. Strategi merger dan akuisisi horizontal
6. Strategi integrasi vertikal

GOING ON THE OFFENSIVE STRATEGIC

OPTIONS TO IMPROVE A COMPANYS
MARKET POSITION
Improve its market position
and business performance

Choosing the basis

for competitive
attack
Spots opportunities to gain
Profitable market share

Choosing which rivals

to attack

GOING ON
TO
OFFENSIVE
STRATEGIES

?????????

Displaying a strong bias

Blue-Ocean strategy
a special kind of
offensive

A leading market share,

excellent profit margins
and rapid growth

THE OFFENSIVE STRATEGIC OPTIONS

Choosing the basis
for competitive
attack

COR
E
CON
CEP
T

Choosing which
rivals
to attack

Blue-Ocean
strategy
a special kind of
offensive

Offensive initiative that exploit competitor

weaknesses stand a better chance of
succeeding than do those that challenge
competitor strengths

1. Market leaders that are vulnerable;

2. Runner-up firm with weaknesses in
area where the challenger is strong;
3. Financial strength and competitive
position;
4. Small local and regional firms with
capabilities

Offer growth in revenues and profits by

Discovering or inventing new industry/
product segments that create altogether
new demand

THE PRINCIPAL OFFENSIVE

STRATEGY OPTIONS INCLUDE THE
FOLLOWING:

Offering an equally good

or better product at a
lower price
Leapfrogging
competitors by being
first to market with nextgeneration products
Pursuing continuous
product innovation to
draw sales and market
share away from less
innovation rivals

Adopting and improving on

the good ideas of other
companies (rivals or
otherwise)
Using hit-and-run or guerrilla
warfare tactics to grab
market share from
complacent or distracted
rivals
Launching a preemptive
strike to secure an
advantageous position that
rivals are prevented or
discouraged from
duplicating?

DEFENSIVE STRATEGIES PROTECTING

MARKET
POSITION AND COMPETITIVE
ADVANTAGE

In a competitive market, all firms are

subject to offensive challenges from
rivals
The purposes of defensive strategies are
to lower the risk of being attacked
Weaken the impact of any attack that
occur and influence challenges to aim
their efforts at other rivals
Protect its most valuable resources and
capabilities from imitation

DEFFENSIVE STRATEGIES CAN TAKE

EITHER OF TWO FORMS

Blocking the
avenues open To
challengers

A defender can introduce new features, add new

models or broaden its product line to close off
gaps and vacant niches to opportunity seeking
challengers;
Offering free training, services, providing
coupons and sample giveaways to buyers most
prone to experiment;
Early announcements new products or
price changes;

Signaling
challengers that
Retaliation is
likely

It can grant volume discount or better financing

terms to dealers or distributors

Publicly management commitment and

maintain of market share, price policy,
cash and marketable securities, firms
Image as a tough defender.

TIMING A COMPANYS OFFENSIVE AND

DEFENSIVE STRATEGIC MOVES
The potential for first
mover advantages

Moving
first is no
guarante
e of
success

The potential for late

mover advantages

To be a first mover or
not

Build a firms reputation and creates

strong brand loyalty. Protection thwart
rapid imitation of the initial move. Setting the technical standard for industry.
Move down the learning curve ahead of
rivals.
Allows a follower to end up with lower
costs than the first-mover. Better performing product. Fast-paced changes in
either technology or buyer need. Allowing late movers to wait until these need
are clarified.
Aggressively (as a first mover or fast
follower). Cautiously (as a late mover).
Likely a 10K marathon or sprint. May be
best to move quickly despite the risks.

STRENTHENING A COMPANYS MARKET

POSITION VIA ITS SCOPE OF OPERATIONS
The scope of the firm refers to the range of activities
which the firm performs internally, the breadth of its
product and service offerings, the extent of its geographic
market presence, and its mix of business, also dimensions
of firm scope have relevance for business level strategy.
COR
E
CONCEPT

Include the firms horizontal scope, which is the range of

product and service segments that the firm serves within
its product or service market. Merger and acquisitions
involving other market participants provide a means for a
company to expand its horizontal scope.
Vertical scope is the extent to which the firm engages in
the various activities that make-up the industrys entire
value chain system, from initial activities such as rawmaterial production all the way to retailing and after-sales
service activities. Its called as a vertical integration.

HORIZONTAL MERGER AND ACQUISITION

STRATEGIES
Merger and acquisitions are much-used strategic options to strengthen a
companys market position
A merger is the combining of two or more companies into single
corporate entity, with the newly created company often taking on a
new name. An acquisition is a combination in which one company,
the acquirer, purchases and absorbs the operation of another, the
acquired.
The difference between a merger and an acquisition relates more to
the details of ownership, management control, and financial
arrangements than to strategy and competitive advantage.

Horizontal merger and acquisitions, which involve combining the

operation of firms within the same product or service market,
provide an effective mean for firms to rapidly increase the scale
and horizontal scope of their core business.

Merger and acquisition strategies

typically set sights on achieving any of
five objectives:
1. Creating a more cost-efficient operation out of the combined companies
2. Expanding a companys geographic coverage

3. Extending the companys business into new product categories

4. Gaining quick access to new technologies or complementary

resources and capabilities
5. Leading the convergence of industries whose boundaries are being
blurred by changing technologies and new market opportunities

WHY MERGER
AND
ACQUISITIONS
SOME TIMES
FAIL TO
PRODUCE
ANTICIPATED
RESULTS

VERTICAL INTEGRATION
STRATEGIES
A vertically integrated firm is one that performance value
chain activities along more than one stage of an industrys value
chain system. A vertical integration strategy can expand the
firms range of activities backward into sources of supply and/or
forward toward end users.
Vertical integration strategies can aim at full integration
(participating in all stage of the vertical chain) or partial
integration (building positions in selected stages of the vertical
chain). Firms can also engage in tapered integration strategies
(which involve of mix of in-house and outsourced activity in any
given stage of the vertical chain)
The disadvantages of a vertical integration strategy: 1. a firm
increase capital investment in the industry, 2. less flexibility in
accommodation shifting buyer preferences, and 3. may not
enable a company to realize economies scale.

OUSOURCING STRATEGIES: NARROWING

THE SCOPE F OPEARTIONS

Outsourcing involves a conscious decision to abandon attempts to perform

certain value chain activities internally and instead to farm them out to
outside specialists. The company can concentrate on marketing and managing
its brand for example.
Outsourcing certain value chain activities: 1. can be performed more
efficiency or effectively by outsiders, 2. the activity is not crucial to the firms
ability to achieve, 3. It improves organizational flexibility and speeds time to
market, and 4. It reduces the companys risk exposure to changing technology
or buyer preferences.
The big risk of outsourcing if: 1. the company will farm out too many or the
wrong types of activities and thereby hollow its own capabilities, and
2. Another risk of outsourcing comes from the lack of direct control.

STRATEGIC ALLIANCES AND PARTNERSHIPS

STRATEGIC ALLIANCE AND COOPERATIVE PARTNERSHIPS PROVIDE
ONE WAY TO GAIN SOME OF THE BENEFITS OFFERED BY VERTICAL
INTEGRATION, OUTSOURCING, AND HORIZONTAL MERGER AND
ACQUISITIONS WHILE MINIMIZING THE ASSOCIATED PROBLEM
A strategic alliance is a formal agreement between two or more
separate companies in which they agree to work collaboratively
toward some strategically relevant objectively. Typically, they involve
shared of financing, resources, risks, marketing, control, productions,
distribution, and mutual dependence, e.q.

A special type of strategic alliance involving ownership ties is the

JOINT VENTURE. A joint venture is a partnership involving the
establishment of an independent corporate entity that the partners
own and control jointly, sharing in its revenues and expenses.

Why and How Strategic Alliances Are

Advantageous
The most common reasons companies enter into strategic alliances are to
expedite/increase the development of promising new technologies or products, to
overcome deficits in their own expertise and capabilities, to improve supply chain
efficiency, to share the risks of high-stake, risky ventures, to gain economies of
scale in production and/or marketing, and to obtain market access.
A company that is racing to stake out a strong position in an industry of the
future needs alliances to:
1. Establish a stronger beachhead for participant in the target industry.
2. Master new technologies and build new expertise and competencies faster
than would be possible through internal efforts
3. Open up broader opportunities in the target industry by melding the firms own
capabilities with the expertise and resources of partners.

How to Make Strategic Alliances Work

A surprisingly large
number of alliances
never live up to
expectations. The
success of alliance
depends on how well
the partner work
together, requires real
in-the trenches
collaboration,
resulting in valuable
win-win outcome, and
its is doomed to fail.
Their strategic alliance
and partnerships often
credit the following

factors:

They create system for managing

their
alliances
They build relationships with
their
partners and establish trust
They protect themselves from
the threat of opportunism by
setting up safeguards
They make commitments to their
partners and see that their
partners do the same
They make learning a routine
part of the management process

THANK YOU