Chapter 6 Strengthening a company s competitive position strategic moves timing and scope of operations

3176 Words May 30th, 2015 13 Pages
CHAPTER 6

STRENGTHENING A
COMPANY’S COMPETITIVE
POSITION: STRATEGIC
MOVES, TIMING, AND
SCOPE OF OPERATIONS

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6–1

1. Learn whether and when to pursue offensive or defensive strategic moves to improve a firm’s market position.
2. Recognize when being a first mover or a fast follower or a late mover is most advantageous.
3. Become aware of the strategic benefits and risks of expanding a firm’s horizontal scope through mergers and acquisitions.
4. Learn the advantages and disadvantages of extending the firm’s scope of operations via vertical integration.
5. Become aware of the conditions that favor farming out certain value chain activities to outside parties.
6. Understand when and how
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6–11

ILLUSTRATION CAPSULE 6.1

Gilt Groupe’s Blue-Ocean
Strategy
in the U.S. Flash Sale Industry

♦ Given the rapidity with which most first-mover advantages based on Internet technologies can be overcome, what would have led Gilt Groupe to expect to build a sustainable competitive advantage based on its initial business model?
♦ Is Gilt Groupe a “one-trick pony” business that the ephemeral nature of a first-mover advantage strategy tends to favor?
♦ How critical is timing to first-mover advantage?
6–12

CORE CONCEPT
♦ A blue-ocean strategy offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand.

6–13

STRATEGIC MANAGEMENT PRINCIPLE
♦ Good defensive strategies can help protect a competitive advantage but rarely are the basis for creating one.

6–14

DEFENSIVE STRATEGIES—
PROTECTING MARKET POSITION
AND COMPETITIVE ADVANTAGE
Purposes of Defensive Strategies

Lower the firm’s risk of being attacked

Weaken the impact of an attack that does occur

Influence challengers to aim their efforts at other rivals

6–15

STRATEGIC MANAGEMENT PRINCIPLE
♦ There are many ways to throw obstacles in the path of would-be challengers.

6–16

BLOCKING THE AVENUES
OPEN TO CHALLENGERS











Adopt alternative technologies as a hedge against rivals attacking with a
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