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Strengthening Competitive Position (Offensive Strategic options (Choosing…
Strengthening Competitive Position
Offensive Strategic options
Choosing a basis for competitive attack
Use the powerful resources to attack rival in the areas where they are weak
Pursuing continuous product innovation to draw sales and market share away from less innovative rivals
Adopting and improving on the good ideas of other companies
Leapfrogging competitions by being first to make with next-generation products
Using hit-and -run guerrilla warfare tactics to grab market share from complacent rivals
Offering an equally good or better product at lower price
Launching a preemptive strike to secure an advantageous position than rivals
Choosing which rivals to attack
Market leaders that are vulnerable
Runner-up firms with weaknesses in areas where challenger is strong
Struggling enterprises that are on the verge of going under
Small local and regional firms with limited capabilities
Blue Ocean Strategy
Offers growth in revenue ans profits by discovering or inventing new industry segments that create new demand
Defensive Strategies- Protecting market position and competitive advantage
Purpose
Lower the risk of being atached
weaken the impact of any attacks that occurs
Influence challengers to aim their efforts at other rivals
Defensive strategies
Blocking the avenues open to challengers
Signaling challengers that retaliation is Likely
Committing the company to a policy of matching competitors prices
Maintaining a war chest of cash and marketable securities
Making an occasional strong counter response to moves of weak competitors
Announcing the managements commitment to maintain the present market share
Timing of Company's offensive and defensive strategic moves
First Mover Advantages
Need to slow the moves of the follower firms or prevent them from imitating the success of the first mover
first mover and late mover advantages and disadvantages
Strengthening the scope of operations
Horizontal Scope- Range of products ans service segments that a firm serves within its focal market
Horizontal M & A
Vertical Integration strategies
Integraitng backward to achieve greater competitiveness
Integrating forward to enhance noncompetitive
Narrowing the scope (Outsourcing)
Contracting out certain vale chain activities to outside vendors
Reduces the Company's risk exposure
Allows to assemble diverse kinds of expertise speedily and efficiently
Activity is not crucial for the sustainable competitive advantage
Can concentrate on its core business, leverage its key resources
Can be performed more cheaply or better by outside specialists
Risk of outsourcing
Need to guard against the oursourinc activities that hallow out the resources and capabilities that it needs to be a master of its own identity
Strategic alliances and partnerships
Strategic Alliance
Formal agreement between 2 or more separate companies in which they agree to work toward some common objectives
Helps to build, sustain or enhance a core competence
Helps block a competitive threat
Facilitate achievement of business objectives
Remedy an important resource deficiency or competitive weakness
Increases the bargaining power of alliance members over suppliers or buyers
Open up new market opportunities
Mitigates significant risk
Joint Venture
Partnership where an establishment of separate entity and the partners jointly own and control, sharing revenues and expenses
Strategic Partnership
Relationship between two or more commercial enterprises and formalized via business contracts
Established when each partner posses business assets or have expertise that will help the other by enhancing business
One partner helping to the other to expand the current market place
Drawbacks
Supplier might get customers and move ahead with forward integration
Requires extensive negotiations
Different Development plans could break the relationship