Strategy Statement To build the leading sensor business, focused on improving efficiency and effectiveness of the Digby with competitive advantages in terms of sustainable development, product diversification and the strength of business value. Business Strategies Porter (1997) suggests in order to gain competitive advantages in the changing business environment, it is essential to design a generic strategy for the business: product differentiation or cost leadership. The competitive strategy is determined at round 2, when recognised our rivals held whole product profile which was the product differentiation strategy. To differentiate our strategy from rivals for competitive advantages, Digby designed to imply the cost …show more content…
Rosenzweig (2013) states four fields of managerial decision making. As it is naturally a zero-sum game, participants in the game are highly correlated. Increasing advantages of our business will lessen the threats from our competitors (Moulin and Vial, 1978). Hence, Digby should emphasis on the third field to create competitive advantages through planning operational and non-operational strategy with rivals’ movements over business lifespan. And combined with the fourth field for core competencies in the long term. In practice, Digby released the new High End-Darwin for sustainable strategic …show more content…
And we will purchase capacities when plant utilisation above 90%. This will expand the business size and have a positive impact on economies of scale. Composed with High End and Size products transfer into Traditional and Low End, we have multiproduct in targeted segments. “Higher firm-level ability raises a firm 's productivity across all products, which induces a positive correlation to a firm’s intensive and extensive margin” (Bernard, Redding and Schott 2006). This means with an effective business strategy and management, businesses can boost sales of all products within the segment. With a larger product profile for Traditional and Low End, it works to generate larger market shares. Refer to Graph 4 and 5, Digby sold twice units of products than its core competitor-Baldwin by having Daze and Dixie in its Traditional segment, which drives its segment market share to double Baldwin’s. The boost in sales and market share prove the correct implication of the
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
Adopting a strategy of differentiation makes firms provide products and services what are distinct in some way valued by customers.
Our strategy began to shift to that directing and focusing primarily on the high end segment while maintaining product’s presence in the traditional segment. On top of that, we landed new products that ended up in the high market segment. In the mid-year analysis, we introduced new products the company can keep up with in the high market segment. We strongly believed that if we continued having strong presence in the traditional and high end categories we would achieve our objectives. As the simulation progressed, we moved our products from the size and performance segments to low end to ensure we doubled our products within these categories. We were hopeful that the products would be cheaper to retain within the R&D. When it comes to product pricing, we always strived to keep our prices low in the industry. In the beginning rounds, we lowered our prices by $6.00 before introducing a new product. We did this to attract the customers and create a relationship so that after we introduce a new product, their awareness can be high. In later rounds, we continued the low pricing strategy in attempt to attract more customers and increase in profits when other products of the market were highly priced. Looking back, we can generally say that while business strategies are imperative to adhere to, having a profitable business is the ultimate goal. Team Digby’s results ended up with an increase in market share in Dixie and Daze as they were in two segments at once, and sustained a steady cumulative profit throughout the
Dess, G. G., Lumpkin, G. T., Eisner, A. B., & McNamara, G. (2012). Strategic Management: Text & Cases (6th Ed.). New York, NY: McGraw-Hill.
Pearce, J.A., & Robinson, R.B. (2013) Strategic Management: Planning for Domestic and Global Competition. (13th Ed.). Boston, MA: McGraw-Hill/Irwin. ISBN-13: 9780078029295
Differentiation through marketing strategies, this is a form of innovation driven by the need to create a superior brand (Sadler, 2003).
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
The protection enhances the ability of sustaining a business in a competitive marketplace for the long run. A firm should also undergo the DYB strategy to get rid of business units and other resources that do not add value to the company 's performance. It should adopt the GYB strategy, in which it would utilize the business opportunities lying at its disposal to its advantage. As a direct result of these two strategies, the company would gain a substantial competitive edge against rivals, as well as boost its profitability in the long run (Grimm, Lee & Smith, 2010). Knowing that today 's business environment is characterized by heightened competition that has led to extensive gaps between industry leaders and laggards, and that there are greater churns among the industry rivals, the GYB and DYB strategies are essential for any modern company. More importantly, the GYB strategy should be focused towards the increase of
Narrow focus on limited value chain activities, competitor’s pricing war and lack of differentiation parity can erode the competitive advantage associated with cost leadership strategy. Similarly, imitation of differentiating features by competition and lack of perceived value of the differentiating features can erode the competitive advantage associated with differentiation strategy.
Both Porter and Miles and Snow’s strategy typologies are based on the concept of strategic equifinality, or the ability for firms to be successful via differing managerial strategies (Hambrick, 2003, p. 116). Porter 's strategy is more generic while Miles and Snow’s is more specific in nature. Porter’s generic strategy typology is based on economic factors centering on the source of a firm’s competitive advantage and the scope of a firm’s target market (González-Benito & Suárez-González, 2010). Porter’s typology emphasizes a firm’s cost, product differentiation or non-differentiation and market focus. When utilizing Porter’s strategy typology, a firm must first decide to target its products toward the mass market versus a market niche or focus. Secondly, a firm will determine if it wishes to minimize costs or differentiate its products with differentiation meaning that firms will most likely forego lower costs (Parnell, 2014, p. 184). This can lead a firm to develop a myriad of strategies between these options. Strategies which may have or not have focus, may or not be differentiated, may or not be low cost or any combination of strategies. In contrast to Porter, Miles and Snow’s typology is more specific in nature.
[13] Porter, M., 2008. The Five Competitive Forces That Shape Strategy. Harvard Business Review, UK.
The book Design Driven Innovation and the classroom material complement each other very well. The basic theory behind the book is that innovation is one of the most important aspects when dealing with competitive advantages within specific markets. Also, every product and service within all available consumer and industrial markets has a meaning. These meanings are commonly mistaken as fixed, “The common assumption, however, is that meanings are not a subject for innovation: they are a given.” The majority of our class discussions have focused on how to go about designing and implementing new strategies in order to change those meanings. Companies such as Nintendo, Apple, Artemide, Whole Foods Market, Alessi, and many others discussed in the book demonstrates that meanings do change. When technological breakthroughs occur, product and service meanings take on a whole new look.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 25-40.
Valdani, E., and Arbore, A., 2013. Competitive Strategies: Managing the Present, Imagining the Future. Palgrave Macmillan.
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.