Strategic offensive principles
-Focusing relentlessly on building competitive advantage and then striving to convert it into sustainable advantage
-Applying resources where rivals are least able to defend themselves
-Employing the element of surprise as opposed to doing what rivals exp
Choosing the basis for competitive attack
- avoid directly challenging a targeted competitor where it is strongest
- use the firm's strongest strategic assets to attack a competitor's weaknesses
- the offensive may not yield immediate results if market rivals are strong competitors
- be prepared
Principal Offensive Strategy Options
1. Offer an equally good or better product at a lower price.
2. Leapfrog competitors by being first to market with next-generation products.
3. Pursue continuous product innovation to draw sales and market share away from less innovative rivals.
4. Pursue
Blue Ocean Strategy
offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand.
Forms Of Defensive Strategies
Actions to block challengers and Actions to signal the likelihood of strong retaliation
first-mover advantages and disadvantages
(2) A-Advantages accruing to the first to enter the market.
D-Disadvantages associated with entering a foreign market before other international business.
first-mover
1.When pioneering helps build a firm's reputation and creates strong brand loyalty
2.When a first mover's customers will thereafter face significant switching costs
3.When property rights protections thwart rapid imitation of the initial move
4.When an ea
scope of the firm
refers to the range of activities that the firm performs internally, the breadth of its product and service offerings, the extent of its geographic market presence, and its mix of businesses.
Horizontal scope
is the range of product and service segments that a firm serves within its focal market.
Vertical scope
is the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system, ranging from raw-material production to final sales and service activities.
Merger
Combination of two or more companies into a single firm
Acquisition
Is a combination in which one firm, the "acquirer," purchases and absorbs the operations of another firm, the "acquired
vertically integrated firm
is one that performs value chain activities along more than one stage of an industry's value chain system.
Vertical integration strategy
Can expand the firm's range of activities backward into its sources of supply or forward toward end users of its products
Full integration
A firm participates in all stages of the vertical activity chain
Partial integration
A firm builds positions only in selected stages of the vertical chain.
Tapered integration
A firm uses a mix of in-house and outsourced activity in any stage of the vertical chain.
Backward integration
involves entry into activities previously performed by suppliers or other enterprises positioned along earlier stages of the industry value chain system.
Forward integration
involves entry into value chain system activities closer to the end user.
Outsourcing
involves contracting out certain value chain activities that are normally performed in-house to outside vendors.
strategic alliance
is a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective
joint venture
is a partnership involving the establishment of an independent corporate entity that the partners own and control jointly, sharing in its revenues and expenses.