This document contains answers to chapter 6 questions after correction. It discusses:
1) How industry forces like changes in the external environment and market size can cause profitable niches to disappear.
2) How it is possible for a company to follow both cost leadership and differentiation strategies simultaneously by using low-cost raw materials and technological innovations.
3) How it is difficult to sustain a competitive advantage for long in hyper-competitive industries due to factors like short product life cycles and new technologies, but the ability to learn and adapt is important.
This document contains answers to chapter 6 questions after correction. It discusses:
1) How industry forces like changes in the external environment and market size can cause profitable niches to disappear.
2) How it is possible for a company to follow both cost leadership and differentiation strategies simultaneously by using low-cost raw materials and technological innovations.
3) How it is difficult to sustain a competitive advantage for long in hyper-competitive industries due to factors like short product life cycles and new technologies, but the ability to learn and adapt is important.
This document contains answers to chapter 6 questions after correction. It discusses:
1) How industry forces like changes in the external environment and market size can cause profitable niches to disappear.
2) How it is possible for a company to follow both cost leadership and differentiation strategies simultaneously by using low-cost raw materials and technological innovations.
3) How it is difficult to sustain a competitive advantage for long in hyper-competitive industries due to factors like short product life cycles and new technologies, but the ability to learn and adapt is important.
Q1. Wat industry forces might cause a propitious niche to disappear?
Ans; propitious niche can disappear if the external environment and the industry changes. It happens when market get smaller because of factors beyond the control of company. A small market for product and services causes to be narrowly demanded.The strategic business unit through its own efforts, not only fills the demand, but
actually causes the market to expand.
Market development can also force a business strategic unit to ignore a niche, when the demand of a product is high in market where supply is low. 2. Is it possible for a company or business unit to follow a cost leadership and a differentiation strategy simultaneously? Why or why not? Ans; Yes, it is possible for a company to use both strategies simultaneously. Following cost leader ship Strategy Company can purchase cheap raw material which reduces cost and can follow diffentiation strategy by including technological innovations in its operations. Some examples are TOYOTA, IBM etc. But it is not correct for every business if these strategies are not properly use by business then business could face failure. 3. Is it possible for a company to have a sustainable competitive advantage when its industry becomes hyper-competitive? Ans; it is becoming very difficult to sustain a competitive advantage for long time in hyper competitive. Market stability is threatened by short product life cycles, new technologies, entry of un expected entrants. The real sustainability doesnt lies in one competitive advantage of one product line, but it lies in ability to learn and bring changes according to situation. 4. What are the advantages and disadvantages of being a first mover in an industry? Give some examples of first movers and late mover firms? Ans: advantages of first movers they are able to establish long lasting impression or brand good will, more time to redefine their processes and perfect their products and services, have better ability to control their resources. Disadvantages are they are bearing economic burden while developing new market, late movers have better technology then first movers. Examples of first movers are coca cola and late movers examples are Facebook and Google.
5: Why are strategic alliances temporary?
Ans: The strategic alliances are formed to achieve a target most alliances are temporary due to following reasons if the objectives are ahieved,when
the indiduval egos dominated over group, conflict arises among partners when objective of alliances are not achieved.