Competitive Strategy PDF

Mahra Alabri Competitive Strategy Chapter 4 Competitive Strategy Stratgy: Plan or road map of actions that a firm or organization will take to achieve its mission and goals. Not...

Mahra Alabri Competitive Strategy Chapter 4 Competitive Strategy Stratgy: Plan or road map of actions that a firm or organization will take to achieve its mission and goals. Not static. The Management Process for Developing a Strategy 1. Develop the vision and mission statement and business model 2. Describe the firms core competencies its customer and its competitive advantage 3. Describe the industry and context for the firm and describe the competitors 4. Determine the firms strengths and weaknesses in the context of the industry and environment 5. Describe the opportunities and threats for the venture 6. Identify the key factors for success using the six forces model 7. Formulate strategic options and select the appropriate strategy 8. Translate the strategy into action plans with suitable measures and controls The six questions for create a dynamic strategy Profitability Why are we pursuing this objective? Where will we be active? How will we achieve our objective? Vision Customer Innovation Mission Market Acquisitions Companies either innovate or buy a product and use it two create your own thing. When will we act and at what speed? What will differentiate our product? With whom will we compete and cooperate? Timing Positioning Competition Execution Competitor response Alliances Acting on the right time is valubale. The six forces model Potential Barriers to Entry into an Industry Economics of scale Cost adcantages independent of scale Productive differentiation Contrived deterrence Government regulation Switching costs  Barriers to entry: Factors that make it costly for companies to enter an industry Swot analysis for AMGEN Orgnizational (internal) Enviormental (external) 1. Strengths: 1. Opportunities: Expertise in development and manufacturing of Expansion of marketed products for new biologic drugs geographies, indications, and formulations High-margin products and limited competition Allocation of resources to discover novel therapeutics Example: YouTube – free, fast, simple to sustain growth YouTube opportunities: premium youtube, downloading 2. Weaknesses: videos, editing tools, youtube shop. Inability to discover novel therapeutics to avoid declines in revenue 2. Threats: YouTube weaknesses: Ads, network Pharmaceutical companies entering the biologics arena Competition from follow-on biologics and pricing pressures YouTube threats: TikTok, Instagrams, Ads Distinctive Competencies Lead to a Competitive Advantage Four common types of strategies and their characteristic Type of stratgey Factor Differentiation Low cost Differentiation-cost Niche Distinctive Innovation and Processes, logistics Innovation and Relationships competencies relationships processes Product differentiation High Low Medium Medium Market segmentation Many segments Mass market Many segments One or two segments Examples Intel, Microsoft RadioShack, Wal-Mart Dell, Southwest Getty Images, Incyte Product that is Similar product to Airlines Targeting small group of different than competitors but way Different product + people, working on competitors. Apple. cheaper. cheaper price. forming relationships. SHIEN, TEMU IKEA Diabetes insulin pump Competitive Strategy Partnership or alliance: Firms agree to cooperate with one another to achieve mutually compatible goals that would be difficult for each to accomplish alone Principle 4 – A clear road map (strategy) for a new venture states how it will act to achieve its goals and attain a sustainable competitive advantage