Strategy: Strategic Management and Mover Advantage Essay

Submitted By rakusa
Words: 963
Pages: 4
Open Document
Starbucks: BSBUX-PSBUX>BDinner-PDinner; Competitive advantage: 1. Returns from unique resources and capabilities (operational capabilities, Schultz’s leadership) 2. Market power due to first mover advantage (locations, brand, and reputation for consistency) Oligopolies: markets that are dominated by a small number of firms, strategic interdependence (firm A’s best decision depends on what firm B does) Nash equilibrium: every player strategy is a best response to everyone else’s Sequential games: look ahead and reason back Market with identical (homogeneous) products: customer care only about price Product differentiation: 1. Horizontal: different varieties 2. Vertical (quality): different WTP Differentiation relaxes price competition: stores two blocks apart, price changes lead to smaller changes in demand Five forces: Rivalry, entrants, buyer, supplier, substitutes (a snapshot, not long-run) Rivalry: 1. Price competition 2. Fixed costs => pressure to gain market share Supplier: input critical, difficult to substitute, small share of cost, little rivalry, forward-integrate Buyer: 1. large share of sales, easily substitute, more rivalry in buyer, backward-integrate Entry: average profits no high if easy; barriers: 1. hard to imitation 2. First mover advantage Industry: highly concentrated, oligopolies, fragmented (restaurants), a bit of everything (beer) Market size: the level of demand limits the number of firms, growing market attracts entry Commercial aircraft: buyers have incentive to bundle purchases Competitive advantage: regulation and patents, access to critical suppliers or channels or complementors, organizational capabilities (Lego), strategic fit or consonance (Mercadona: training, generous pay, no layoff policy), scale vs. market size, geographic preemption, build willingness to pay through R&D, advertising or brand image, switching cost, network effects Linear Technology: 1. rivalry low: very differentiated 2. Buyers: chips are small share of costs, each buyer is small part of chip maker’s 3. Suppliers: employees can forward integrate 4. Barriers to entry: expertise, reputation or relationships 4. First mover advantage: each sub-market too small for more than one firm, reputation for quality or reliability Profit=NOPAT-WACC x Capital=(1-tax rate)xOperating Income-WACCxCapital=(1- tax rate)x {(Sales-COGS)/Sales-Operating expenses/Sales-WACCxCapital/Sales}xmarket sharexmarket size Euronext: different buyers care very differently about each dimension, network effects eBay very strong network effects in auction, Amazon in retail relies on economies of scale Envelope strategy: entry by one platform provider into another’s market by bundling own platform’s functionality with that of the market Utility=Income-cost; agency problem: divergent interests and imperfectly observable effort Line of sight: performance does not capture all relevant dimensions of a job. General knowledge: easy to communicate; specific knowledge: costly to communicate Decentralize: more likely when knowledge is specific tradeoff between fostering initiative and incentives and fostering cooperation and coordination PCSD: nonlinear plans can distort agents’ behavior and change who is attracted to the job, multi-part compensation plans seek to
Show More

Related Documents: Strategy: Strategic Management and Mover Advantage Essay

Subscribe To The Opinion That The Time Tested Way For Market Leaders To Command Their Markets

aggregate the first mover advantages. To support this opinion, it is necessary to consider the internet market. In the 1990s, the internet market was broadly characterized by the land grabbing element where companies rushed to acquire the market shares. Early entrants such as eBay, Yahoo, and Amazon acquired large market capitalization because investors’ analysts projected that early entry would result in higher returns. Consequently, widespread opinions on first mover advantages and higher market…

Words 598 - Pages 3

Strategy Management Essay

Themes of Strategic Management __ Strategy as a response to or initiation of change: Reactive Vs. Proactive Strategy __ Strategy as developing and sustaining a niche or a competitive/distinctive advantage: __ Strategy as a number of Ps: _ Plan _ Process _ Pattern (as a stream of decisions) _ Ploy __ Strategy as redefinition of an organization or an aspect of its operation __ Strategy as a bridge between organization and environment…

Words 1144 - Pages 5

Essay on Course Notes Exam Study Guide

part of your company marketing plan. With this evaluation, you can establish what makes your product or service unique--and therefore what attributes you play up in order to attract your target market. study competitors future objectives, current strategies, assumptions, and capabilities better able to predict competitor’s behaviors when forming its competitive actions and responses TWO COMPONENTS to assess: Market Commonality & Resource Similarity “The question: To what extent are firms competitors…

Words 2522 - Pages 11

The Battle Between The Handset Manufacturer And Microsoft

Furthermore, the external strategies which Microsoft uses are first mover and strategic alliances. Microsoft has a benefit to become the first mover advantage. Microsoft was the one to create the smartphone in the concept of downsizing the PC. Thus, by adopting the pioneering strategy, Microsoft will be benefited in such a way that other handset manufacturers will follow the same innovation. Becoming the first mover may rule to gain market leadership as it offers a new…

Words 1797 - Pages 8

mgmt2101 final exam notes Essay

Currency, inflation, interest rates, accounting practices, cultures, social customs, laws, political stability ii) Operational nature (micro) -> hierarchy of managers Communication, coordination, motivation, differences in organizational principles and management philosophies 2. Globalization World moving away from self-contained national economies toward an interdependent, integrated global economic system (economic definition) The shift towards a more integrated and interdependent world economy Describes…

Words 8745 - Pages 35

the ppi Essay

sure you have a strategy? Donald C. Hambrick Key learning from an article by Donald C. Hambrick and James W. Fredrickson from the Academy of Management Executive James W. Fredrickson magazine 2001 Volume 15, No.4. Strategic threads and not Strategy! • “Our strategy is to be the low-cost provider.” • “We’re pursuing a global strategy.” • “The company’s strategy is to integrate a set of regional acquisitions.” • “Our strategy is to provide unrivaled customer service.” • “Our strategic intent is to…

Words 1459 - Pages 6

Dhl Strategy to Enter China Market Essay

Introduction DHL Worldwide Express headquartered in Bonn, Germany, a privately held worldwide delivery service comprised of DHL Airways and DHL International, is the world’s oldest and largest international air-express company. They begins by operating door-to-door express delivery express, transporting documents only between San Fransisco, California, and Honolulu, Hawaii. DHL was founded by three young shipping executives; Adrian Dalsey, Larry Hillblom, and Robert Lynn who were casting about for…

Words 4077 - Pages 17

Management Structures And Phases Of A Poor Business

Chandler Claims: -Successful firms capitalize on economies of scale and scope, create management structures and invest in research and development -Once a firm loses the opportunity to be a first mover, it is hard to regain competitive advantage Concept list: -Economies of scale and scope -Invest in marketing and distribution -Geographical expansion in product expansion -First movers -R&D -Entrepreneurial enterprise-staying small -Diversification, related and unrelated -Separation…

Words 1309 - Pages 6

Study Guide for International Business Essay

EXAM III: Suggested Study Guide1 Chapter 13 - Global Strategy • Understand how companies can increase profitability and profit growth. • What are the different types of strategic positions a company can take (low cost, differentiation, niche). Understand the efficiency curve and the importance of aligning internal operations to strategic positioning. • How does the firm as a value chain help companies in reaching their strategic positioning? Understand both primary and support activities…

Words 6609 - Pages 27

Chapter 12 Essay

The advantages frequently associated with entering a market early are commonly known as: A. inaugural advantages. B. first-mover advantages. C. initial-entrant premiums. D. proactive-mover benefits. E. primary entrant advantages 4. Once attractive markets have been identified, it is important to consider the: A. timing of entry. B. competition. C. costs involved. D. insurance needed in the event of failure. E. All of these answers are correct 5. Which of the following is not a first-mover advantage…

Words 6895 - Pages 28