Competitive Strategy and Market Dynamics Overview

Competitive Strategy

Competitive strategy explores how firms achieve and maintain competitive advantage in their industries.

Managing Competition

Analyzing competitive dynamics and executing strategic moves. Understand the players and the winning strategies

Marketplace Positions

Leaders
• Innovators
Challengers
• Marketing-focused
Followers
• Low price rivals
Nichers
• Differentiate

Defining Competitors

Identifying business scope in evolving landscapes.

Competitive Advantage

Something a firm does that has value for consumers and others can not match easily • Firms compete on cost differentiation • Competitive Strength assessment • Kill the Company Exercise

Porter's Five Forces

• Threat of new entry
• Supplier bargaining power
• Buyer bargaining power
• Substitute threat
• Intensity of competitiverivalry

Resource-Based View

A resource based-view (RBV)perspective focuses on a firms internal resources and capabilities as the primary source of competitive advantage

Rescue based view capabilities

• Resources: Tangible and intangible assets of acompany
• Capabilities; Activities the firm performs well
• Capabilities build resources
• Capabilities should be market relevantand should be protected

Porter's Generic Strategies

Cost leadership - providing a cheaper product to capture customers
• Differentiation - providing a unique product customers can't get elsewhere
• Focus - serving a particular niche market and their unique needs well

Cost Leadership

Strategy of offering lower prices to attract customers.

Differentiation

Creating unique products that stand out in the market.

Focus Strategy

Targeting specific niche markets with tailored offerings.

Dynamic Capabilities

Firm's ability to adapt resources in changing environments.
Sensing: Identifying new opportunities and threats
• Seizing: Acting on opportunities for investment or innovation
• Reconfiguring: Adjusting resources and strategies to remain competitive

Successful Competitive Strategies

Walmart: Walmart's competitive strategy is based on costleadership.
• Apple: Apple employs a differentiation strategy by focusing oninnovative design, user-friendly interfaces, and a strong brand
• Tesla: Tesla's strategy involves playing the niche game
• Southwest Airlines: Southwest Airlines uses a cost leadershipstrategy by focusing on low-cost, no-frills service
• Airbnb: Airbnb's strategy is based on disruption and differentiation by creating a platform that connects travelers with unique lodging options

Failed Competitive Strategies

Kodak: Kodak failed to adapt to the digital photography revolution.• Blockbuster: Blockbuster's failure to innovate and adapt to therise of digital streaming services like Netflix led to its downfall.• Nokia: Once a leader in the mobile phone industry, Nokia failed tokeep up with the smartphone revolution due to their reliance onoutdated technology and operating systems• Sears: Sears struggled with a lack of innovation and an inability tocompete with more agile and customer-focused retailers likeWalmart and Amazon..

Reverse course

Leadership Change: Bring in new leaders with fresh ideas and turnaround skills.
Financial Restructuring: Fix financial problems first.
Operational Efficiency: Streamline operations to cut waste.
Reevaluate Business Model: Adjust the core business model if needed.
Customer Focus: Improve customer satisfaction and relationships.
Innovation & Differentiation: Invest in new ideas to stand out.
Strategic Partnerships: Form alliances to access new markets or resources.
Employee Engagement: Motivate employees for successful change.

successful turnarounds

Apple and IBM

Apple's Turnaround

Steve Jobs revitalized Apple through innovation and focus.

IBM's Strategic Pivot

Shifted focus from hardware to services for recovery.

Marketing Mix

Product
Stylish, not cheap
Swatch Lab in Milan
• Price
Low

Premium Pricing

High prices reflecting advanced technology and luxury branding.

Direct Sales Model

Selling directly to consumers, bypassing traditional dealerships.

Price Control

Tesla manages pricing directly, avoiding dealership markups.

Price Skimming

High initial prices to recover R&D, then lower prices.

Dynamic Pricing

Frequent price changes based on market factors.