MGT 5491 Session 8 Strategic and Global Management

MGT. 5491 Session # 8 Strategic and Global Management: Corporate Strategies http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #1

Corporate/Enterprise (Parent) Level Strategies http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #2

The New Reality - #1 Firms must learn to compete differently if they are to achieve strategic competitiveness in the 21 st-century competitive landscape. To provide an idea of what this means, new ways of competing may include: Ø bringing new good and services to market more quickly ØThe use of new technologies (e. g. , Amazon. com) ØDiversifying the product line (e. g. , Barnes and Nobles into music as a catalyst for growth) http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #3

The New Reality - #2 Ø Shifting product emphasis (e. g. , U-Haul’s new focus on accessory sales) (i. e. , Dual Branding) Ø Consolidation (e. g. , the merger of Exxon and Mobil) Ø Combining online selling with physical stores (e. g. , Comp. USA’s new strategy) http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #4

The New Reality - #3 Ø Dell Model for Growth ØHave New Business Model (maybe changes every 5 years? ) ØIdentify Core Competencies and then improve the four capabilities ØOutsource non-core competencies ØCreate a “Brand Management Company” http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #5

Brief Overview of Corporate Strategy • Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #6

Key Questions of Corporate/Firm-level Strategies 1. What businesses should the corporation/enterprise be in? 2. How should the corporate/G. O. office manage the array of business units (GBU’s/SBU’s/ Wholly owed subsidiaries) Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #7

21 st Century Organization Strategies for Growth and Profitability Multi-International: One Consumer Products Company (Corporate Level) Demand Side Strategies: Supply Chain Strategies: Global Scope Driving Funding Growth (8) Growth (5) Consumer Promotion 3600 Marketing Superior Knowledge of Customers/Consumers Coverage of Trade Strong Alliances/ Partnerships with Customers Acquisitions/JV’s Innovative New Products/Services Creating the Best Place To Work (10) Vision Direction: Streamline and obtain A Seamless Supply Chain/ Demand Side (Value Chain) Integration Use of Technologies to create Cost Savings IS/SAP/ Consolidated Partnership HPWS Guiding Core Values, Philosophies, Principles, Mission, & Others Move to “Global” And “Local” Regional Business Focus on Product Quality Shared Leadership, Coaching & Feedback Lean & Flat Structures Horizontal, Structures, Systems, & Processes: Integration/communication/coordination Community Involvement Empower Stimulating Regionalization People Recognition & Careers With Local Control Financial Rewards http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #8 Source: Barry A. Macy, Successful Strategic Change, Berrett-Koehler Publishers, San Francisco, CA (forthcoming)

Corporate (and International) Strategies • Three directions for corporate strategy – Growth • M&A , JV, and SA (external growth) • International (internal growth) – Stability (internal growth) – Renewal (internal growth) • Retrenchment • Turnaround • Increase the four capabilities via core competencies http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #9

How does it fit together? Vision Direction and Strategies: 1 st Vision Direction Business Imperatives: 2 nd Year 2009 Success Factors Capabilities: 3 rd Improvement in the four Capabilities via Core Competencies along Value Chain External and Internal Strategies (Corporate & Business) Globalization (External Growth) Strategic Alliances (External and/or Internal Growth) Future Work Trends Barry A. Macy, Successful Strategic Change, Berrett-Koehler Publishers, http: //macy. ba. ttu. edu/5491/week 8/Week San Francisco, CA. (forthcoming) 8 Strategy. ppt Slide #10

Organizational Growth: External and/or Internal • External and Internal Growth Strategy – One that involves the attainment of specific growth objectives by increasing the level of an organization’s capabilities – Typical growth strategies include goals for: • Increase in sales revenues • Profits • Other balanced scorecard performance measures http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #11

Types of Growth Strategies International Concentration Organizational Growth Diversification • Related Businesses • Unrelated Businesses Vertical Integration • Related Businesses Horizontal • Unrelated Businesses Integration: Along Value Chain http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #12

Concentration Organization concentrates on its primary lines of business and looks for ways to meet its growth objectives through increasing its level of capability in this primary business http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #13

Concentration Customers Product(s) Product-Market Exploitation Product Development Market Focused Development Product/Market Diversification http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #14

Another Possible Way for Growth http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #15

The “Right” People or the “Right” Organization? A Values-Based View of Strategy Fundamental Values or Beliefs Design Management Practices That Reflect and Embody These Values Use These to Build Core Capabilities Invent a Strategy That is Consistent with the Values and Uses the Talents & your four Capabilities to Compete in New and Unusual Ways • What are our basic Principles, Philosophies and Core Values? • What do we believe in? • What policies and practices are consistent with these Values and Philosophies? • What can we do for the customer better than our competitors? • Given our core capabilities, how can we deliver value (EVA) to customers in a way our competitors cannot easily imitate? • Senior management “manages” the values and culture of the firm. Senior Management’s Role http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #16

Possible Strategic Focus Trust: Is it Valuable, Rare, Costly to Imitate, and Nonsubstitutable? The following examples are provided as evidence that the trust structures contribute to the above average performance of each firm. Ø Anderson & Associates practices open-book management, meaning that all financial data are readily accessible on the firm’s Intranet. The company’s CEO claims that this practice contributes to employee loyalty. Ø Radius, a French restaurant in Boston, relies upon trust to sustain one of its competencies – excellent teamwork. Ø MTW Corp. , a software and Internet applications provider, relies upon “expectation agreements” among the boss , an employee, and his or her work team. http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #17

Possible Strategic Focus Trust: Is it Valuable, Rare, Costly to Imitate, and Nonsubstitutable? ØWhat is the value of a friend who can be trusted compared to one who cannot be trusted? Ø Would you be willing to loan your car to the less-thantrustworthy acquaintance if they were going to need it for a few hours? Ø Would you trust them at all? For firms, trust relationships can easily make the difference between a deal getting done or not, or it can impact the size of the deal that is done. Trust carries a great deal of weight, especially in an environment where it is in short supply. AND Today’s deal that is based on trust can lead to a sustainable edge when future deals are considered. http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #18 3 -18

Possible Strategic Focus Trust: Is it Valuable, Rare, Costly to Imitate, and Nonsubstitutable? Trust and organizational success are closely linked. Trust benefits the organization in that it reduces the overall transaction costs. There are many attributes to trust, the most prominent of which is risk. This risk can be divided into two categories: Ø Managerial Risk – the general risk of management decisions Ø Organizational Risk – characteristic of forms with volatile income streams http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #19

Possible Strategic Focus Trust: Is it Valuable, Rare, Costly to Imitate, and Nonsubstitutable? Davis, Schoorman, Mayer and Tan define trust as “the willingness of a party (trustor) to be vulnerable to the actions of another party (trustee) based on the expectation that the trustee will perform an action important to the trustor, regardless of the trustor’s ability to monitor or control the trustee. ” Trust between general manager and employees may be a source of competitive advantage. This trust rests upon the trustor’s perception of the trustees: Ø ability – skills and competencies by which trustee may influence outcomes Ø benevolence – degree to which trustor believes trustee acts for the good of the trustor Ø integrity – belief that the trustee will follow a set of principles that are desired by the trustor http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #20 3 -17

Possible Strategic Focus Trust: Is it Valuable, Rare, Costly to Imitate, and Nonsubstitutable? The Davis, et al. study suggests that these three factors of trust can contribute to competitive advantage of the firm. We can conclude that trust satisfies at least three of the four (and conceivably all four) criteria for sustainable competitive advantage. Ø Valuable – the study demonstrated that trust increased profitability and reduced turnover. Ø Rare – this relationship dynamic is uncommon. Ø Costly to imitate – trust is an intangible social construct that cannot easily be replicated. Ø Nonsubstitutable – possibility, since trust is difficult to observe http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #21 3 -17

Another Way: Diversification Value Chain Capabilities/ Core Competencies Product Similarities Related Diversification Similar Technology Distribution Channels Customer Use http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #22

Diversification • Level – Horizontal • Anti-trust laws prohibit a lot of these – Vertical • Suppliers buying buyers (or vice versa) • Two Types – Related Businesses – Unrelated Businesses http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #23

Related Diversification and Competitive Advantage • Competitive advantage can result from related diversification if opportunities exist to – Transfer expertise / capabilities / technology – Combine related activities into a single operation and reduce costs – Leverage use of firm’s brand name reputation – Conduct related value chain activities in a collaborative fashion to create valuable competitive capabilities http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #24

What is Unrelated Diversification? • Involves diversifying into businesses with – NO strategic fit – NO meaningful value chain relationship – NO unifying strategic theme • Approach is to venture into “any business in which we think we can make a profit” • Firms pursuing unrelated diversification are often referred to as conglomerates http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #25

Attractive Merger/Acquisition Targets • Companies with undervalued assets – Capital gains may be realized • Companies in financial distress – May be purchased at bargain prices and turned around • Appeal of Unrelated Diversification Strategy – Business risk scattered over different industries – Financial resources can be directed to those industries offering the best profit prospects – If bargain-priced firms with big profit potential are bought, shareholder wealth can be enhanced http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #26

Drawbacks of Unrelated Diversification • Difficulties of competently managing many diverse businesses • Lack of strategic fits which can be leveraged into competitive advantage – Consolidated performance of unrelated businesses tends to be no better than sum of individual businesses on their own (and it may be worse) • Likely effect is 1 + 1 = 1. 5, not 1 + 1 = 3 – Promise of greater sales-profit stability over business cycles seldom realized http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #27

Combination Related-Unrelated Diversification Strategies • Dominant-business firms – One major core business accounting for 50 – 80 percent of revenues, with several small related or unrelated businesses accounting for remainder • Narrowly diversified firms – Diversification includes a few (2 -5) related or unrelated businesses http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #28

Combination Related-Unrelated Diversification Strategies (cont. ) • Broadly diversified firms – Diversification includes a wide ranging collection of either related or unrelated businesses or a mixture • Multi-business firms – Diversification portfolio includes several unrelated groups or related businesses http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #29

Diversification and Corporate Strategy • A company is diversified when it is in two or more lines of business • Strategy-making in a diversified company is a bigger picture exercise than crafting a strategy for a single line-of-business – A diversified company needs a multi-industry, multibusiness strategy – A strategic action plan must be developed and implemented for several different businesses competing in diverse industry environment http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #30

Levels and Types of Diversification Low Levels of Diversification Single business > 95% of revenues from a single business unit Dominant business Between 70% and 95% of revenues from a single business unit A A B Moderate to High Levels of Diversification Related constrained Related linked (mixed) < 70% of revenues from dominant business, and only limited links exist Very High Levels of Diversification Unrelated-Diversified A < 70% of revenues from dominant business; all businesses share product, technological and distribution linkages Business units not closely related B A B C C http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #31

When to Diversify • Some companies do EXCELLENTLY and are not diversified – Mc. Donald’s, SWA, Coca-Cola, Domino’s Pizza, Wal -Mart, Fed. Ex, Timex, Gerber – Why stay single business • Clear understanding of who we are/what we do • No Dilution of management’s attention – Risks of a single business strategy • Putting all the “eggs” in one industry basket • Unforeseen changes can undermine a single business firm’s prospects http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #32

Adding Value by Diversification most effectively adds value by either of three mechanisms: By developing economies of scope between business units in the firms which leads to synergistic benefits By developing market power which leads to greater returns ECR (Efficient Consumer Response) • Efficient Assortment • Efficient Product Introduction • Efficient Replenishment • Efficient Promotion • TOTAL ECR SCORE = Sum of 4 above http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #33

Alternative Diversification Strategies Sharing Activities Assumptions: Strong sense of corporate identity Clear corporate mission that emphasizes the importance of integrating business units Incentive system that rewards more than just business unit performance (balanced scorecard) http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #34

Alternative Diversification Strategies Related Diversification Strategies Sharing Activities (Shared Global Services) Transferring Core Competencies Unrelated Diversification Strategies Efficient Internal Capital Market Allocation Restructuring http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #35

Alternative Diversification Strategies Sharing Activities Key Characteristics: Sharing Activities often lowers costs or raises differentiation Example: Using a common physical distribution system and sales force such as Procter & Gamble’s disposable diaper and paper towel divisions Sharing Activities can lower costs if it: Achieves economies of scale Boosts efficiency of utilization Helps move more rapidly down Learning Curve Example: General Electric’s costs to advertise, sell and service major appliances are spread over many different products http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #36

Alternative Diversification Strategies Sharing Activities Key Characteristics: Sharing Activities can enhance potential for or reduce the cost of differentiation Example: Shared order processing system may allow new features customers value or make more advanced remote sensing technology available Must involve activities that are crucial to competitive advantage Example: Procter & Gamble’s sharing of sales and physical distribution for disposable diapers and paper towels is effective because these items are so bulky and costly to ship http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #37

Alternative Diversification Strategies Transferring Core Competencies Key Characteristics: Exploits Interrelationships among divisions Start with Value Chain analysis Identify ability to transfer skills or expertise among similar value chains Exploit ability to transfer activities http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #38

Summary Model of the Relationship Between Firm Performance and Diversification Resources Incentives Managerial Motives Capital Market Intervention and Market for Managerial Talent Diversification Strategy Firm Performance Strategy Implementation http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #39

Performance Diversification and Firm Performance Dominant Business Related Constrained Unrelated Business Level of http: //macy. ba. ttu. edu/5491/week 8/Week Diversification 8 Strategy. ppt Slide #40

How does it fit together? Vision Direction and Strategies: 1 st Vision Direction Business Imperatives: 2 nd Year 2009 Success Factors Capabilities: 3 rd Improvement in the four Capabilities via Core Competencies along Value Chain External and Internal Strategies (Corporate & Business) Globalization (External Growth) Strategic Alliances (External and/or Internal Growth) Future Work Trends Barry A. Macy, Successful Strategic Change, Berrett-Koehler Publishers, http: //macy. ba. ttu. edu/5491/week 8/Week San Francisco, CA. (forthcoming) 8 Strategy. ppt Slide #41

Questions for Strategy to Consider Competitive Dynamics http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #42

Strategic Actions and Organizational Size - 1 An organization’s size affects the likelihood that it will take competitive actions as well as the types of action it will take and their timing. Small firms are more likely to launch competitive actions and tend to be quicker in doing so. http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #43 5 -10

Strategic Actions and Organizational Size - 2 Large firms are likely to initiate more competitive actions as well as strategic actions during a given time period. Thus, the competitive actions a firm will likely ecounter from larger competitors will be different than the competitive actions it will encounter from smaller firms. http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #44 5 -10

Strategic Actions and Organizational Size - 3 Large organizations often have the slack resources required to launch a larger number of total competitive actions, and thus do. However, smaller firms have the flexibility needed to launch a greater variety of competitive actions. http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #45 5 -10

Factors Leading to More Complex Rivalry Declining emphasis on single, domestic markets and increasing emphasis on global markets Advances in communication technology make coordination easier across multiple markets Advances in technology and innovation have increased competitiveness of small and medium sized firms National barriers are falling due to the number and scope of trade agreements (GATT, NAFTA, EEC) http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #46

Competitive Dynamics Results from a series of competitive actions and competitive responses among firms competing within a particular industry Competitive Rivalry Exists when two or more firms jockey with one another in the pursuit of better market position http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #47

A firm’s strategic conduct is dynamic in nature Actions taken by one firm elicit responses from competitors Competitive Dynamics Competitive responses lead to additional actions from the firm that acted originally Actions and responses shape the competitive positions of each firm’s business level strategy http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #48

Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation Do managers understand the key characteristics of competitors? Capability http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #49

Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation Capability Does the firm have appropriate incentives to attack or respond? http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #50

Model of Interfirm Rivalry: Likelihood of Attack and Response Drivers of Competitive Behavior Awareness Motivation Capability Does the firm have the necessary resources to attack or respond? http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #51

Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Do firms compete with each other in multiple markets? Resource Similarity http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #52

Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity Multipoint competition tends to reduce competitive interactions, but increases the likelihood of response where interaction occurs For example, airlines price flights similarly but respond quickly when competitors introduce promotional prices http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #53

Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity Do competitors possess similar types or amounts of resources? http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #54

Model of Interfirm Rivalry: Likelihood of Attack and Response Competitor Analysis Market Commonality Resource Similarity Firms are less inclined to attack a firm that is likely to retaliate Firms with similar resources are more likely to be aware of each other’s competitive moves Firms with dissimilar resources are more likely to attack http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #55

Model of Interfirm Rivalry: Likelihood of Attack and Response Interfirm Rivalry: Attack & Response Likelihood of Attack First Mover Incentives Likelihood of Response Type of Competitive Action Actor’s Reputation Dependence on the Market Resource Availability First Mover advantage can be substantial http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #56

First Mover Firms that take an initial competitive action Generally possess the resources and capabilities that enable them to be pioneers in new products, new markets or new technologies Can earn above average profits until competitors respond Gain customer loyalty, helping to create a barrier to entry by competitors Advantage depends upon difficulty of imitation http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #57

Second Mover Firms that respond to a First Mover’s actions Second Movers frequently imitate First Movers Speed of response often dictates success Should evaluate customers’ response before moving “Fast” Second Movers can capture some of initial customers and develop some brand loyalty Avoid some of the risks associated with First Move Must possess necessary capabilities to imitate http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #58

Types of Competitive Actions Strategic Actions Significant commitments of specific and distinctive organizational resources Difficult to implement Difficult to reverse Example Tactical Actions Major Acquisition Undertaken to “fine tune” strategy Relatively easy to implement Relatively easy to reverse Example Price cut http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #59

Model of Interfirm Rivalry: Likelihood of Attack and Response Ability for Action and Response Relative Size Speed Firm size can have opposing effects on competitive dynamics Innovation Quality http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #60

Model of Interfirm Rivalry: Likelihood of Attack and Response Ability for Action and Response Relative Size Speed Innovation Quality Large firms may exert market power over rivals and erect barriers to entry against smaller competitors However, smaller competitors may be more nimble and innovative “Think and act big and we’ll get smaller. Think and act small and we’ll get bigger. ” -- Herb Kelleher, CEO, Southwest Airlines http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #61

Model of Interfirm Rivalry: Likelihood of Attack and Response Ability for Action and Response Relative Size Speed Innovation Quick response is crucial to both the first mover and the fast second mover Quality http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #62

Model of Interfirm Rivalry: Likelihood of Attack and Response Ability for Action and Response Relative Size Speed Innovation Quality Consistent innovation is required for market leadership in many dynamic industries http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #63

Model of Interfirm Rivalry: Likelihood of Attack and Response Ability for Action and Response Relative Size Speed Innovation Quality Exceeding customer expectations is a necessity to compete in the 21 st century http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #64

Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes Competitive Market Types Slow cycle markets are Slow, Standard or Fast Cycle Competitive Outcomes Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes frequently shielded by monopoly power or very strong brand loyalties This market outcome and lack of interfirm rivalry may lead to sustained competitive advantage Evolutionary Actions Growth-Oriented Actions Market-Power Actions http: //macy. ba. ttu. edu/5491/week 8/Week 8 Strategy. ppt Slide #65

Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes Standard cycle markets Competitive Market Types often lead to highly Slow, Standard or Fast Cycle competitive pressures Competitive Outcomes despite world class products Sustained Competitive Advantage Firms with multimarket Temporary Advantage competition may dampen rivalry somewhat Evolutionary Outcomes Sustained competitive Evolutionary Actions advantage is a possible Growth-Oriented Actions outcome in 8 this instance Market-Power Actions http: //macy. ba. ttu. edu/5491/week 8/Week Strategy. ppt Slide #66

Model of Interfirm Rivalry: Likelihood of Attack and Response Outcomes Fast cycle markets are Competitive Market Types intensely dynamic and a Slow, Standard or Fast Cycle first mover advantage is Competitive Outcomes often unsustainable Sustained Competitive Advantage Temporary Advantage Evolutionary Outcomes Firms may cannibalize older generation products while introducing new innovative premium products Evolutionary Actions Growth-Oriented Actions Sustainable competitive Market-Power Actions http: //macy. ba. ttu. edu/5491/week 8/Week advantage is unilkely 8 Strategy. ppt Slide #67