Chương 5 Các phương án trong Chiến lược

Chương 5 Các phương án Chiến lược

1. CHAPTER 5 Business-Level Strategy: Creating and Sustaining Competitive Advantages Copyright Anatoli Styf /Shutterstock

2. Learning Objectives After reading this chapter, you should have a good understanding of: 5-1 The central role of competitive advantage in the study of strategic management and the three generic strategies: overall cost leadership, differentiation, and focus. 5-2 How the successful attainment of generic strategies can improve the firm’s relative power vis-à-vis the five forces that determine an industry’s average profitability. 5-3 The pitfalls managers must avoid in striving to attain generic strategies. 5-4 How firms can effectively combine the generic strategies of overall cost leadership and differentiation. 5-5 What factors determine the sustainability of a firm’s competitive advantage. 5-6 The importance of considering the industry life cycle to determine a firm’s business-level strategy and its relative emphasis on functional area strategies and value-creating activities. 5-7 The need for turnaround strategies that enable a firm to reposition its competitive position in an industry.

3. The Central Role of Competitive Advantage Consider . . . In order to create and sustain a competitive advantage, companies need to stay focused on their customers’ evolving wants and needs and not sacrifice their strategic position as they mature and the market around them evolves. They also have to have a strategy…

4. Sustaining a Competitive Advantage Business-level strategies require a choice. How to overcome the five forces and achieve competitive advantage? Suggestion – Use Porter’s three generic strategies . Overall cost leadership Differentiation Focus

5. Three Generic Strategies (1 of 3) Exhibit 5.1 Three Generic Strategies Source: Adapted from Competitive Strategy: Techniques for Analyzing Industries and Competitors. Michael E Porter, 1980, 1998, Free Press. Jump to Appendix 1 for long image description.

6. Three Generic Strategies (2 of 3) Overall cost leadership is based on: Creating a low-cost position relative to a firm’s peers Managing relationships throughout the entire value chain to lower costs Differentiation implies: Products and/or services that are unique & valued Emphasis on nonprice attributes for which customers will gladly pay a premium A focus strategy requires: Narrow product lines, buyer segments, or targeted geographic markets Advantages obtained either through differentiation or cost leadership

7. Three Generic Strategies (3 of 3) Exhibit 5.2 Competitive Advantage and Business Performance Particulars Differentiation and Cost Differentiation Cost Differentiation and Focus Cost and Focus Stuck in the Middle Return on Investment (%) 35.5 32.9 30.2 17.0 23.7 17.8 Sales growth (%) 15.1 13.5 13.5 16.4 17.5 12.2 Gain in market share (%) 5.3 5.3 5.5 6.1 6.3 4.4 Sample Size 123 160 100 141 86 105

8. Overall Low-Cost Leadership (1 of 2) Overall cost leadership involves Aggressive construction of efficient scale facilities Vigorous pursuit of cost reductions from experience Tight cost and overhead control Avoidance of marginal customer accounts Cost minimization in all activities in the firm’s value chain, such as R&D, service, sales force, and advertising

9. Overall Low-Cost Leadership (2 of 2) Cost leadership requires l earning to lower costs through experience: the experience curve. With experience, unit costs of production processes decline as output increases. This strategy also requires competitive parity. Being “on par” with competitors with respect to low-cost, differentiation, or other strategic product characteristics Permits cost leaders to translate cost advantages directly into higher profits

10. Improving Competitive Position vis-à-vis the Five Forces: Cost Leadership An overall low-cost position Protects a firm against rivalry from competitors Protects the firm against powerful buyers Provides more flexibility to cope with demands from powerful suppliers who want to increase input costs Provides substantial entry barriers due to economies of scale and cost advantages Puts the firm in a favorable position with respect to substitute products

11. Pitfalls of Cost Leadership Too much focus on one or a few value chain activities Increase in the cost of the inputs on which the advantage is based Strategy can be too easily imitated A lack of parity on differentiation Reduced flexibility Obsolescence of the basis of a cost advantage

12. Differentiation (1 of 2) A differentiation strategy can take many forms: Prestige or brand image Quality Technology Innovation Features Customer service Dealer network

13. Differentiation (2 of 2) Differentiation requires: A level of cost parity relative to competitors Integration of multiple points along the value chain Superior material handling operations to minimize damage Low defect rates to improve quality Accurate and responsive order processing Personal relationships with key customers Rapid response to customer service requests Differentiation along several different dimensions at once

14. Improving Competitive Position vis-à-vis the Five Forces: Differentiation An overall differentiation strategy Creates higher entry barriers due to customer loyalty Provides higher margins that enable the firm to deal with supplier power Reduces buyer power because buyers lack suitable alternatives Establishes customer loyalty and hence less threat from substitutes

15. Pitfalls of Differentiation Uniqueness that is not valuable Too much differentiation Too high a price premium Differentiation that is easily imitated Dilution of brand identification through product line extensions Perceptions of differentiation may vary between buyers and sellers

16. Focus (1 of 2) A focus strategy is based on the choice of a narrow competitive scope within an industry. A firm selects a segment or group of segments (or niche) and tailors its strategy to serve them. A firm achieves competitive advantages by dedicating itself to these segments exclusively.

17. Focus (2 of 2) A focus strategy has two variants. Cost focus Creates a cost advantage in its target segment Exploits differences in cost behavior Differentiation focus Differentiates itself in its target market Exploits the special needs of buyers

18. Improving Competitive Position vis-à-vis the Five Forces: Focus An overall focus strategy Creates higher entry barriers due to cost leadership or differentiation or both Can provide higher margins that enable the firm to deal with supplier power Reduces buyer power because the firm provides specialized products or services Focused niches less vulnerable to substitutes

19. Pitfalls of Focus Erosion of cost advantages within the narrow segment Highly focused products and services still subject to competition from new entrants and from imitation Focusers too focused to satisfy buyer needs

20. Combination Strategies: Integrating Low-Cost and Differentiation Integration of low-cost and differentiation strategies makes it difficult for competitors to duplicate or imitate strategy. The goal of a combination strategy is to provide unique value in an efficient manner.

21. Combination Strategies Combining overall low-cost and differentiation strategies can take several forms. Automated and flexible manufacturing systems allow for mass customization. Data analytics allows firms to customize product and services while using resources efficiently. Exploitation of the profit pool concept creates a competitive advantage. Using information technology, firms can integrate activities throughout the extended value chain.

22. Improving Competitive Position vis-à-vis the Five Forces: Combination An integrated/combination overall low-cost and differentiation strategy Creates higher entry barriers due to both cost leadership and differentiation Can provide higher margins that enable the firm to deal with supplier power Reduces buyer power because of fewer competitors O verall value proposition reduces threat from substitutes

23. Pitfalls of Combination Strategies Firms that fail to attain both overall low-cost and differentiation strategies may end up with neither and become “stuck in the middle.” Firms can also underestimate the challenges and expenses associated with coordinating value-creating activities in the extended value chain. Firms can also miscalculate sources of revenue and profit pools in the firm’s industry.

24. Question 1 Which statement regarding competitive advantages is true? If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer. With an overall cost leadership strategy, firms need not be concerned with parity on differentiation. In the long run, a business with one or more competitive advantages is probably destined to earn normal profits. Attaining multiple types of competitive advantage is a recipe for failure.

25. Industry Life Cycle Stages (1 of 2) The industry life cycle Introduction Growth Maturity Decline Generic strategies, functional areas, value-creating activities, and overall objectives all vary over the course of an industry life cycle.

26. Industry Life Cycle Stages (2 of 2) Exhibit 5.6 Stages of the Industry Life Cycle Factor Introduction Growth Maturity Decline Generic strategies Differentiation Differentiation Differentiation Overall cost leadership Overall cost leadership Focus Market growth rate Low Very large Low to moderate Negative Number of segments Very few Some Many Few Intensity of competition Low Increasing Very intense Changing Emphasis on product design Very high High Low to moderate Low Emphasis on process design Low Low to moderate High Low Major functional area(s) of concern Research and development Sales and marketing Production General management and finance Overall objective Increase market awareness Create consumer demand Defend market share and extend product life cycles Consolidate, maintain, harvest, or exit

27. Strategies in the Introduction Stage The introduction stage is when: Products are unfamiliar to consumers. Market segments are not well-defined. Product features are not clearly specified. Competition tends to be limited. Strategies: Develop a product and get users to try it. Generate exposure so the product becomes “standard.”

28. Strategies in the Growth Stage The growth stage is: Characterized by strong increases in sales Attractive to potential competitors When firms can build brand recognition Strategies: Create branded differentiated products Stimulate selective demand Provide financial resources to support value-chain activities

29. Strategies in the Maturity Stage The maturity stage is when: Aggregate industry demand slows Market becomes saturated, few new adopters Direct competition becomes predominant Marginal competitors begin to exit Strategies: Create efficient manufacturing operations Lower costs as customers become price-sensitive Adopt reverse or breakaway positioning

30. Strategies in the Decline Stage The decline stage is when: Industry sales and profits begin to fall. Price competition increases. Industry consolidation occurs. Strategies: Maintaining the product position Harvesting profits and reducing costs Exiting the market Consolidating or acquiring surviving firms

31. Question 2 As markets mature , costs continue to increase. applications for patents increase differentiation opportunities increase. there is increasing emphasis on efficiency.

32. Turnaround Strategies A turnaround strategy involves reversing performance decline and reinvigorating growth toward profitability through Asset and cost surgery Selected market and product pruning Piecemeal productivity improvements