SGMT 3000 Lecture Notes - Lecture 6: Emerging Markets, Inventory Turnover, Cost Leadership
13 Dec 2017
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Chapter 6: business level strategy and the industry environment. Fragmented industry: large number of small and medium sized companies. Reasons for fragmentation (1) lack of scale of economies: customer needs are so specialized that only a small amount of product is required- no scope for large mass production operations to keep the market satisfied. Steady stream of entrants may keep the industry fragmented. Ie there is low cost for a massage therapist to start a business. Focus strategies work the best in these kind of industries: companies can specialize in customer group, need or geographic region. Horizontal mergers: merge with or acquire competitors- combining them into a single, large enterprise, able to recognize economies od scale and build a national brand. Customer demand for electric cars is limited because customers are unfamiliar with the technology (worry about charging, or that it will take too long). In most product markets, the changing needs of customers lead to the s-shaped growth curve.
