Generic strategies after two decadesppt.pptx

approach to generic strategies

1. Generic strategies after two decades: a reconceptualization of competitive strategy By : John A. Parnell

2. A refined conceptualization Build on value Market control

3. Emphasis on value The delivery of value is fundamentally linked to the RBV( resource-based view) Organizations possessing rare, valuable, and inimitable resources possess a greater ability to execute a strong value proposition than those without such resources.

4. German-owned grocer Aldi : Market control is difficult to assert in grocery industry , so Aldi places its emphasis on delivering a Value proposition.

5. / HOW

6. Delivering a value Aldi products is private-labeled , allowing the firm to have rock-bottom prices from suppliers. Stores are modest in size , much smaller than other chain grocer. Maximizing inventory turnover, by only stocks common food and related products.

7. The retailer doesn’t accept credit cards , eliminating 2-4% for the transaction. Customers bag their own groceries . Customers bring their own bags or purchase them from ALDI with a nominal charges. Insertion of a turn back quarter if the customers turn back the carts to its row, no need for employees to collect the shopping carts.

8. Outline If resources associated with delivering value can be readily duplicated , the organization must improve aggressively and constantly to remain successful.

9. Emphasis on market control Business implementing the market control doesn’t offer a relatively strong value proposition.

10. / HOW

11. BY : Restricting the entry of new competitors Preventing customers from easily switching to existing competitors. Although firm resources are utilized to exert control, the ability to do so is inherently linked to factors in the environment.

12. EX: A network TV station operating in a small town The station can garner an “inside track” on the community if regulations make it very difficult for another station to open across town.

13. The organization is in an enviable position because success is based more on market characteristics associated with control than on its value proposition relative to stations in other communities. .

14. The shortcoming of this strategic approach is clear. If a time comes when barriersfall and switching costs are minimized, value-oriented rivals become threats and a business relying on a control emphasis may fail . However, some businesses may be more able to maintain their market control positions over a period of time than others.

15. Moderate market control and value emphasis When : attractive position for a start up business . Although for stable ongoing organization ex : IGA

16. IGA tend to locate at rural /country locations that are less attractive to larger chain stores. It is the only or largest among its limited locale.

17. The key barrier to entry is small market size and The primary switching costs are time and convenience. ( no need to travel long distances. Delivering value through confirming on “hometown “/ rural area

18. Strong market control and value emphasis “ Big boxers” like retailing giant Wal-Mart

19. Value Through delivering moderate quality product with low price

20. Market control Switching costs for many customers by opening stores in small cities where customer w ould have to drive elsewhere to shop at major competitor. Erected barriers to entry by translating massive economies of scale into everyday low prices

21. Make considerable control over its suppliers,

22. Lack of emphasis on either value or market control