Industrial Economics by me

notes

Strategic anticompetitive behavior can be

defensive strategy

Защитная форма определяется в зависимости от данной рыночной структуры (степень конкуренции на рынке) и обычно формулируется в соответствии с ожидаемой эволюцией рынка.

offensive strategy

Наступательная стратегия, напротив, более активна и касается выбора и решений фирм, стремящихся добровольно изменить данную структуру рынка.

the choice of strategy depends on

Technical, economic, financial, organizational

the choice of strategy also depends on

* stability or instability of economy
* changes of the legal structures (юр структуры)
* evaluation of available techniques
* political and scientific changes
* evaluation of international cycle

\

\

3 generic strategies proposed by Porter are:

* cost leadership
* differentiation
* focus

\

even low profitability market can…

be able to generate high profits

Porter’s generetic strategies can be illustrated through the figure:

* target scope (Industry wide, market segment)
* Cost advantage (Strategy of leadership in costs, focus strategy on a given segment)
* Product uniqueness( Differentiation strategy, focus strategy on a given segment)

eliminate incumbent rivals

устранение действующих конкурентов

augment it’s market share

увеличить свою долю рынка

Porter’s advantages of cost leadership

* access to financing required for significant investment in strategic technical and organizational assets leading to cost reduction
* skill in expertise on designing products for efficient manufacturing and shorter/flexible assembly process

assembly process 

процесс сборки

Advantages of differentiation strategy

* high level of Research and Development(R&D) and innovative behavior
* skill and creativity in product development
* sales team able to successfully communicate the specific characteristics of the product relatively to rival products
* Brand reputation regarding the quality and reliability of the firm’s products

Focus strategy is -

concentrates on a narrow segment and tries to achieve either a cost of advantage or differentiation. Also^ high of customer loyalty

Porter’s industry forces-Market constraints. 5 Forces:

* Entry Barriers
* Buyer Power
* Supplier Power
* Threat of substitutes
* Rivalry

Domination strategies

the strategy states that the competitive firm does have low costs regarding it’s rivals productions conditions

Differentiation products

more or less substitutable

Different products

specific product, not substitutable, different markets

objective differentiation, is due to the real differences among the products’ characteristics can be 2 forms:

* Horizontal diff-differences in the characteristics, consumers preferences are heterogeneousand at a same price( __Sporty car and a Station wagon at a same price__)

(__Heterogeneous products can be quite different and require considerations other than price__) 
* Vertical diff- preferences are homogeneous, when two goods have the same price (the difference between a simple TV and s Smart-Tv)
* some consumers will be willing to pay more for higher quality

(Homogeneous *means two things that are alike, price will be a big factor in your decision)*

Subjective differentiations is

due to the differences in consumers’ perceptions (восприятие) about the goods. Advertisement is a crucial factor that modifies these perceptions and push to buy.

(after-sales service, the packaging, cultural or social imagery of a product)

Product is

a set of services or a bundle of characteristics globally consumed by individuals

knowledge

(scientific-invention level of the process of change)