Snikdho Sworov Haque

ID: 1835078660

Q 2. What is competitive advantage? Discuss the strategies to make it sustainable?

Answer: Competitive advantage refers to factors that allow a company to produce goods or
services better or more cheaply than its competitors. It is the leverage a business has over its
rivals.

Competitive advantages are attributed to a variety of factors including distribution network,

branding, cost structure, the quality of product offerings, customer service, intellectual property,
etc. Some strategies to make competitive advantages sustainable are discussed below:

Market Understanding

Need to understand the market and its segments and look for those niches that aren’t well
serviced by competitors and can be profitably targeted and sold to.

Acquire Customer Attention

Developing an understanding of what customers need is and establish a value proposition that
will grab their attention towards our products or services.

Customer Support

Working out the key things which we need to do better for supporting and delivering our value
proposition. For example, service levels, quality, branding, pricing, etc.

Know Yourself

We need to understand in which arenas our strengths and core competencies lie on and the ways
that can be used to represent those in an innovative manner to our chosen market.

Know Your Target Group:

Our target market often thinks feels and acts differently than us. Despite our best effort to put on
your target consumer hat, we cannot be them. They view our brand and our competition in a
different light, a light that we need to illuminate with our strategic brand plan. Need to stay close
to the target and do research early and often.

Connect Customers:

An emotional connection with the target market can be the holy grail of our companies marketing
strategies. Functional relationships are great, but fleeting as products and services evolve and
“one-up” one another for our business. It’s the emotional connections that keep a target market
loyal and coming back to us. These are the relationships we should strive to develop and nurture.
It is these relationships that foster longevity and sustainable competitive advantage.

Sensitivity: Internal
 Q 3. How can a manager adapt business-level strategies considering Market Development and
Industry Life Cycle?

Answer: As a manager adapting to the market is crucial and needs to build different strategies
according to situation demands. Among the situations, Development of the market and Life span
(cycle) of the industry are two big factors. Managers should be well aware and be prepared with
the strategies.

Market Development

One can grow by leveraging his product knowledge to reach new customers. More than likely,
one has spent time and money developing his product and service offering. Assuming he is
happy with his current offering, extending his strategy into new markets is a logical next step.
This is aptly called a market development strategy.

Increase the present customers’ rate of use

This can be done by:

• Increasing the size of the purchase

• Maximizing the rate of product obsolescence
• Finding new uses for the product
• Advertising other uses
• Offering incentives for increased use

Attracting your competitors’ customers

One needs to lure customers away from his competitors by establishing differentiation between
him and them by increasing advertising efforts or cutting product prices.

Attract nonusers to buy your products

This process can be done by offering trial uses of products, adjusting the price up or down, and
promoting other uses to attract these customers.

Expanding Geographically

When thinking about expanding, first need to think about where to cultivate new business.
Options are other regions, nationally, or internationally. Geographical expansion works well for a
company that wants to expand its service territory because it needs a physical location to serve
its customers.

Develop totally new products

To grab the market sometimes needs to develop a new product out of the comfort zone which will
also give complement to existing products. This certainly develops market size.

Sensitivity: Internal
 Industry Life Cycle

Introduction: In this phase, the strategy is to achieve market acceptance and seed future growth.
In this stage product innovation is at a maximum. The common strategy to achieve objectives in
this stage is to initiate and leverage network effects. Network effects refer to the positive effect
that a user of a product or service has on the value of that product for other users.

Growth: In this stage of the life cycle, the growth rate of the market accelerates. An industry
standard is often set during this stage so the main strategy would be set the business-standard. A
standard is an agreed-upon solution about a common set of engineering features and design
choices or others. This can emerge bottom-up through competition or imposed top-down by the
government or other standard-setting agencies. Once a standard has been established,
competition moves from product innovation to process innovation. Process innovation refers to
creating new ways to produce existing products or deliver existing services more efficiently.

Shakeout: During this stage of the cycle, growth rate delines and firms begin to compete directly
with one another for market share, rather than capturing a share of an increasing pie. Weaker
firms are forced out of the industry. Profit erodes and only the strongest and most efficient firms
survive as increasing rivalry in the industry as firms begin to cut prices and offer more services to
gain more market share. Hence, the strategy will be to give emphasis on process innovation
increases while the declines the importance of product innovation. Differentiation or integration is
the business level strategy at this stage.

Maturity: At this point, only a few strong firms remain and the industry morphs into an oligopoly.
Demand now consists of replacement or repeat purchases. The market has reached its maximum
size and industry growth is likely zero or negative. So, the strategy would be to give more focus
on process innovation and give products within minimal cost by exploring cost-cutting initiatives.
Cost-leadership or integration is the business level strategy at this stage.

Decline: Market growth becomes negative as a result of changes in the external environment.
Process and product innovations cease. Remaining excess industry capacity results in strong
pressure on prices and can further increase the competitive intensity, especially if the industry

Sensitivity: Internal
 has high exit barriers. Hence, the strategy options in this points are: Exit, Harvest, Maintain,
Consolidate. So, the company can end-product production, can capitalize on what the company
already achieved within the whole period and introduce new types of products. In a nutshell, cost-
leadership, differentiation or integration strategy is the key in this stage.

Sensitivity: Internal