Business-lvl Strategy and the Industry Environment

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Business-lvl Strategy and the Industry Environment by Mind Map: Business-lvl Strategy and the Industry Environment

1. Chaining

1.1. New locations adhere to same basic formulae

1.2. Build national brands quickly

1.3. Could be very costly

2. Franchising

2.1. License the right to open and operate new location

2.2. Obligation to pay a fee (franchisee)

2.3. Fast growth with low capital risk

3. Fragmented Industry

3.1. Large number of small-medium sized companies

3.2. Example: Dry cleaning, hair salon, health club, etc-

3.3. Brand loyalty - difficult to build a brand thru Diff. in certain locations.

3.4. Consolidate

3.4.1. Value Innovation

3.4.1.1. Offer more value to their customer set, and do so at a lower cost.

3.4.1.1.1. Standardization of processes

3.4.1.1.2. Attainment of scale economies

4. Horizontal Merger

4.1. Merge or acquire competitors

4.2. Combine into a single larger enterprise

4.3. Brand positioning and economies of scale

5. Strategies in Embryonic and Growth Industries

5.1. Technological innovation creates a new product opportunity

5.2. Reasons for slow growth in market demand

5.2.1. Limited performance and poor quality

5.2.2. customer unfamiliarity with new product

5.2.3. poorly developed distribution channels to get product to customers

5.2.4. lack of complementary products that increase value of product for customer

5.2.5. high production costs due to small volumes of production

5.3. Example: Intel in 1975, Microsoft.

5.4. From Embryonic to Growth

5.4.1. Mass market starts to develop for its product

5.4.1.1. 1. ongoing tech progress makes product easier to use and value increases for customer

5.4.1.2. 2. complementary products developed increase value

5.4.1.3. 3. companies in the industry work to find ways to reduce costs of producing new products at lower prices and stimulate demand

6. Nature of Market Demand

6.1. 1. Innovators (1%)

6.2. 2. Early adopters (5%)

6.3. The competitive chasm is between early adopters and early majority. (Downfall and spread)

6.4. 3. Early majority (24%)

6.5. 4. Late majority (45%)

6.6. 5. Laggards (24%)

7. Factors of customer demand acceleration

7.1. Relative advantage

7.2. Complexity

7.3. Compatibility

7.4. Triability

8. Strategy in Mature Industries

8.1. Deter Entry

8.1.1. Product proliferation

8.1.2. Limit price

8.1.3. Strategic commitments

8.2. Manage rivalry

8.2.1. Price signaling

8.2.2. Price leadership

8.2.3. Non-price competition

8.2.4. Market penetration

8.2.5. Product development

8.2.6. Market development

8.2.7. Product proliferation

8.2.8. Capacity control

8.2.8.1. Factors causing excess capacity

8.2.8.2. Choose capacity control strategy

9. Strategies in Declining Industries

9.1. Establish Severity of decline

9.2. Choose a strategy

9.2.1. Leadership

9.2.2. Niche

9.2.3. Harvest

9.2.4. Divestment