Business Unit Strategy: Concepts & Special Dimensions

13
Michael Seymour Matt Anderson

description

Business Unit Strategy: Concepts & Special Dimensions. Michael Seymour Matt Anderson. 3 Contexts (Stages) of Industry Evolution. Emerging Stage High Costs (Often Unpredictable) Technology is Immature Fierce Competition Low Barriers to Entry - PowerPoint PPT Presentation

Transcript of Business Unit Strategy: Concepts & Special Dimensions

Page 1: Business Unit Strategy: Concepts & Special Dimensions

Michael SeymourMatt Anderson

Page 2: Business Unit Strategy: Concepts & Special Dimensions

Emerging Stage◦ High Costs (Often Unpredictable)◦ Technology is Immature◦ Fierce Competition◦ Low Barriers to Entry◦ Undeveloped Supplier Relationships/Distribution Channels

Growth Stage◦ Increased Segmentation◦ Focus Shift to Expanding Market Shares◦ Customers become More Knowledgeable◦ Entry of ‘Follower’ Firms

Maturity & Decline Stage◦ Firm Must Chose Balance Between:

Low-Cost/Differentiation Strategy Multiple/Single Industry Segments

◦ Declining Growth → Less Forgiving Environment◦ Attractive Profits are Still Attainable

Page 3: Business Unit Strategy: Concepts & Special Dimensions

Tend to be Extremely Difficult:◦ Exit Barriers◦ “Ripple Effect”

Page 4: Business Unit Strategy: Concepts & Special Dimensions

Fragmented Industry: No Single Company or

Small Group of Firms has Large enough Market Share to Strongly Effect Industry Structure/Outcomes

Success is Dependant on Creative Strategizing

Ex: H. Wayne Huizinga & Waste Management Corp.

Page 5: Business Unit Strategy: Concepts & Special Dimensions

Deregulation: Lifting of Artificial Entry Constraints that Allows New Players to Enter a Market

(1975) SEC Abolished Fixed Rates for U.S. Securities Brokers

Has both Positive & Negative Impact on Markets

Page 6: Business Unit Strategy: Concepts & Special Dimensions

Hypercompetitive Market: Characterized by Intense Competitive Rivalry, Short Product Life Cycles, Emergence of New Technologies & Major Shifts in Market Boundaries

Success Often Depends on Element of Surprise

3 Major Qualities Needed to Succeed

Page 7: Business Unit Strategy: Concepts & Special Dimensions

Speed◦ Pressures to speed◦ Requirements of speed◦ Methods to speed◦ Consequences of speed

Creating Value through Innovation

Page 8: Business Unit Strategy: Concepts & Special Dimensions

The key to success in more and more industries

How a company responds to meeting customer’s expectations

Public images are synonymous with speed

Ex: Domino’s, AAA

Page 9: Business Unit Strategy: Concepts & Special Dimensions

Customer expectations Need for competitive advantage Competitor strategies Industry shifts

Page 10: Business Unit Strategy: Concepts & Special Dimensions

Refocused mission Compatible culture Communication upgrades Process reengineering New metrics

Page 11: Business Unit Strategy: Concepts & Special Dimensions

Streamline operations Upgrade technology Form partnerships

Page 12: Business Unit Strategy: Concepts & Special Dimensions

Sustaining innovation◦ Some are incremental, others are breakthroughs

Disrupting innovation◦ Disrupts established basis of competition

Focus on growth rather than profit Create a culture of innovation

Page 13: Business Unit Strategy: Concepts & Special Dimensions

Steps◦ Top-level commitment to innovation◦ Long-term focus◦ Flexible organization structure◦ loose and tight planning and control◦ Include appropriate incentives by creating an

environment for innovation