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Prentice Hall, 2004 Chapter 5Wheelen/Hunger
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Situational Analysis
Situational Analysis:– Process of finding a strategic fit
between external opportunities and internal strengths while working around external threats and internal weaknesses.
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TOWS Matrix
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Resource-Based Approach
Resource:
An asset, competency, process, skill, or knowledge controlled by the corporation.
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Prentice Hall, 2004 Chapter 5Wheelen/Hunger
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Competitive Strategy
Industry Structure:–Fragmented Industry
• Many small and medium-sized local companies compete for small shares of total market– Focus strategies predominate
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Competitive Strategy
Industry Structure:–Consolidated industry
• Mature industry dominated by a few large companies– Cost Leadership or Differentiation predominate
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Dimensions of Quality
Quality
• Performance• Features• Reliability• Conformance• Durability• Serviceability• Aesthetics• Perceived Quality
Dimensions
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Competitive Strategy
Strategic rollup:–Quickly consolidate fragmented
industry
–Money from venture capital
–Entrepreneur acquires hundreds of owner-operated firms
–Creates large firm with economies of scale
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Competitive Strategy
Strategic rollup:–Differ from Conventional M&A’s
• Large number of firms• Owner-operated firms• Goal to reinvent entire industry
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Competitive Tactics
Tactic:–Specific operating plan detailing how a
strategy is to be implemented in terms of when and where it is to be put into action.• Timing tactics• Market location tactics
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Competitive Tactics Timing Tactics:
–First mover (pioneer)• Reputation as industry leader• High profits• Sets standards for subsequent products in
the industry
–Late mover• Able to imitate technological advances
of others– Keeps R&D costs down– Keeps risks down
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Competitive Tactics
Market Location Tactics:–Offensive Tactics
• Frontal assault• Flanking maneuver• Bypass attack• Encirclement• Guerrilla warfare
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Competitive Tactics
Market Location Tactics:–Defensive Tactics
• Raise structural barriers• Increase expected retaliation• Lower the inducement for attack
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Cooperative Strategies
Cooperative Strategies:–Collusion
• Active cooperation of firms to reduce output and raise prices– Explicit– Tacit
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Cooperative Strategies
Cooperative Strategies:–Strategic Alliance:
– Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial.
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Cooperative Strategies
StrategicAlliance
Access to markets
Achieve competitiveadvantage
Obtain technology
Reduce financial risk
Reduce political risk