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Strengthening A Company'S Competitive Position: Strategic Moves, Timing, and Scope of Operations
Strengthening A Company'S Competitive Position: Strategic Moves, Timing, and Scope of Operations
STRENGTHENING A COMPANY’S
COMPETITIVE POSITION
Strategic Moves, Timing, and Scope of
Operations
Student Version
Copyright ®2012 The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
Maximizing the Power of a Strategy
6–2
GOING ON THE OFFENSIVE—
STRATEGIC OPTIONS TO IMPROVE
A FIRM’S MARKET POSITION
6–3
Choosing Which Rivals to Attack
Runner-up firms
Struggling Small local
Market leaders with weaknesses
enterprises on and regional
that are in areas where
the verge of firms with limited
vulnerable the challenger
going under capabilities
is strong
6–4
DEFENSIVE STRATEGIES—
PROTECTING MARKET POSITION
AND COMPETITIVE ADVANTAGE
6–5
TIMING A FIRM’S OFFENSIVE AND
DEFENSIVE STRATEGIC MOVES
♦ Timing’s Importance:
● Knowing when to make a strategic move is
as crucial as knowing what move to make.
● Moving first is no guarantee of success or
competitive advantage.
● The risks of moving first to stake out a
monopoly position must be carefully
weighted.
6–6
STRENGTHENING A COMPANY’S
MARKET POSITION VIA ITS SCOPE
OF OPERATIONS
Extent of its
Size of its
Range of its geographic
Breadth of its competitive
activities market
product and footprint on
performed presence and
service offerings its market
internally mix of
or industry
businesses
6–7
HORIZONTAL MERGER AND
ACQUISITION STRATEGIES
♦ Merger
● Is the combining of two or more firms
into a single corporate entity that often
takes on a new name.
♦ Acquisition
● Is a combination in which one firm, the
acquirer, purchases and absorbs the
operations of another firm, the acquired.
6–8
VERTICAL INTEGRATION STRATEGIES
6–9
Types of Vertical Integration Strategies
Vertical Integration
Choices
6–10
Backwards Integration Towards Suppliers
6–11
Integrating Forward to Enhance
Competitiveness
6–12
STRATEGIC ALLIANCES AND
PARTNERSHIPS
♦ Strategic Alliance
● Is a formal agreement between two or more
separate firms in which they agree to work
cooperatively toward common objectives.
♦ Joint Venture
● Is a type of strategic alliance in which the
partners set up an independent corporate
entity that they own and control jointly,
sharing in its revenues and expenses.
6–13
Capturing the Benefits of Strategic Alliances
Being sensitive
to cultural
differences
Recognizing that
Picking a good the alliance must
partner benefit both sides
Strategic
Alliance Factors
6–14
The Drawbacks of Strategic Alliances
and Partnerships
6–15
Principle Advantages of Strategic Alliances
6–16