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Chapter 10

BUSI 4220U Chapter 10: BUSI4220U - Chapter 10

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BUSI 4220U
Salma Karray

Strategic challenges addressed in chapter 10 Transition periods are commonly accompanied by a shakeout during which weaker businesses fail, withdraw from the industry, or are acquired by other firms Challenges in mature markets o A primary marketing objective of all competitors in mature markets is simply to hold their existing customers Challenges in declining markets o Technological advances, changing customer demographics, tastes, or lifestyles, and development of substitutes Shakeout: the transition from market growth to maturity Characteristics of the transition period Strategic traps during the transition o The failure to recognize the events signaling the beginning of the shakeout period o Get caught in the middle during the transition period without a clear strategic advantage o Failure to recognize the declining importance of product differentiation and the increasing importance of price or service o Sacrificing market share in favor of shortrun profit Strategic choices in mature markets Success in mature markets requires a strategy to sustain a competitive advantage, customer satisfaction, and loyalty, and creative marketing programs to pursue growth or profit opportunities as conditions change Strategies for maintaining competitive advantage o Analyzer and defender strategies may be appropriate for units with a leading, or at least a profitable, share of one or more major segments in a mature industry o Both analyzers and defenders can attempt to sustain a competitive advantage in established product markets through differentiation of their product offering (either on the basis of superior quality or service or by maintaining a lowcost position) o In both consumer and commercial markets, customers seek good value for the money, either a solid, nofrills product or service at an outstanding price or an offering whose higher price is justified by the superior benefits it delivers on one or more dimensions Methods of differentiation
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