Competition
& Product Strategy
Chapter 2
Introduction
• In business, as in life, the primary and basic objective is to survive.
• In a volatile and turbulent environment, survival will only be
achieved by the fittest and most flexible organizations.
• To survive, one must compete.
• Competition is the process by which the ‘invisible hand’ of the
market seeks to solve the basic economic problem of maximizing
satisfaction from the consumption of scarce resources.
How to manage scarcity?
Introduction
• Organizational innovation –
task specialization and division
of labor
• Social innovation – the
establishment of market and
exchange
• Technological innovation – the
harnessing of energy, creation
of tools etc
Factors Influencing Competitive Success
Marketing
Organizational
Environment
Strategic
Managerial
Market research
Size
Technological change
Direction of company
Management
Customer service
Culture
Rate of competition
Company policy
Product quality
Structure
Intensity of competition
Stakeholders, customer,
suppliers, employees,
other parties etc
Manufacturing capability
Expertise
• Accelerating technological change
The
Changing
Business
Environment
• Globalization
• Mergers, acquisitions and strategic
alliances
• Demographics
• Deregulation and privatization
• Changes in business practices-downsizing,
outsourcing, reengineering etc.
• Ethical and ecological concerns
A demand for quality and advice
A movement towards a service culture
Environment
Facing By The
Management
An emphasis upon the specialist
Shortening strategic time horizons
Scenario planning replacing forecasting
A wider international outlook
Tighter legislation
Environmental Change
Marketing
Competition:
Product
Strategy is
Central
Strategic Options
Strategies for
Competing
Through
Products