Nama : Dedy Mulyadi Mujianto

Nim : 21702009
Akuntansi Semester VI

Tugas Manajemen Strategi

1. What industry forces might cause a propitious niche to disappear?
2. Is it possible for a company or business unit to follow a cost leadership strategy and a
differentiation strategy simultaneously? Why or why not?
3. Is it possible for a company to have a sustainable competitive advantage when its industry
becomes hypercompetitive?
4. What are the advantages and disadvantages of being a first mover in an industry? Give
some examples of first mover and late mover firms. Were they successful?
5. Why are most strategic alliances temporary?

Answer :
1. Propitious niches can disappear if the external environment and the industry changes.
This happens when the market gets smaller because of factors beyond the control of the
company and strategic business unit.
2. It is possible for a company to continue a cost leadership strategy and a differentiation
strategy simultaneously but it does not work for everyone. Some businesses rather follow
the low cost way by striving for efficiencies and economies of scale rather than focusing
on differentiating themselves from the competitors in a way other than price.
3. It is possible for a company will have a sustainable competitive if the leadership have 3
strategy :
a) Cost Leadership Strategy
The cost leader outperforms its competitors by offering products or services at a lower
cost than they can. Customers prefer a lower cost product or service if it provides
them the same need satisfaction as the comparable products available in the market
do. When all firms offer products at a comparable price, the cost leader is able to earn
an above average profits due to the low cost of its products. Moreover, the cost
leadership provides a margin of safety to the firm to lower price if the competition
grows intense and yet earn more or less the same level of profit.
b) Differentiation Strategy
A differentiation firm can charge a premium price, gain new customers and command
customers’ loyalty for the uniqueness of its product that the customers value In order
to pursue a differentiation (value added) strategy, an accurate picture of the target
market will have to be obtained to ensure that there are sufficient ways in which to
Nama : Dedy Mulyadi Mujianto
Nim : 21702009
Akuntansi Semester VI
differentiate the product, and that the marketplace can be subdivided and is willing to
pay for the differentiation.
An effort will then have to be made to avoid imitation, and this may involve a regular
redefinition of the basis of differentiation. For the same reason, it would be desirable
for the differentiation to be based on a mix of features and activities rather than a
simple product feature or service, and for it to involve any parts of the value chain.
Added protection from imitation may also be possible by linking into the value chains
of suppliers and buyers.
Differentiation, whether innovation -or marketing-based, is more appropriate in
dynamic industry environments, in which it can help to avoid, at least in the short run
potentially more costly forms of competition such as price cuts. However, as it often
involves new technologies and unforeseen customer and competitor reactions, it also
contributes, in turn to environmental unpredictability.
As far as staffing and administrative requirements are concerned, differentiation
requires the use of experts, and the establishment of mechanisms to facilitate the
coordination of these experts, who may work in different functional departments, or
may come from outside of the company.
c) Focus Strategy
The focus strategy is directed to serving the needs of a limited customer group or
segment. ‘A focused company concentrates on serving a particular market niche,
which may be defined geographically, by type of customer or by segment of the
product line’.
Choosing a niche by type of customer means serving a particular type of customers
such as only the very rich, or the very young or the very adventurous. Focusing only a
segment of the product line means choosing only a particular type of product such as
fast motor-cars, or vegetarian foods. A focus strategy requires specialization in some
way. Marketing to such a niche would again involve a choice between cost focus and
differentiation focus.
Cost focus is a low-cost competitive strategy that focuses on a particular buyer group
or geographic market and attempts to serve only this niche, to the exclusion of others.
In using cost focus, the company or business unit seeks a cost advantage in its target
market.
Nama : Dedy Mulyadi Mujianto
Nim : 21702009
Akuntansi Semester VI
Differentiation focus, like cost focus, concentrates on a particular buyer group,
product line segment, or geographic market. This is the strategy successfully followed
by Casey’s General Stores, Morgan Motor Car Company. In using differentiation
focus, the company seeks differentiation in a targeted market segment.
4. Advantages of Differentiation Strategy:
a) Differentiation protects a company against competitors to the extent the customers
develop brand loyalty for its products. Brand loyalty is a very valuable asset as it
protects the company on all fronts. For instance, powerful suppliers do not create a
problem as the company’s strategy is targeted to the price than the cost of production.
Thus a differentiator can bear a moderate rise in the prices of its inputs better than the
cost leader.
b) Powerful buyers also do not pose a threat to the differentiator as it offers the buyers a
unique product and command high brand loyalty.
c) Product differentiators are in a position to pass increases in the prices of inputs on to
the buyers, as they are willing to pay the premium price.
d) Differentiation and brand loyalty build a barrier for potential competitors to enter the
industry.
e) Differentiation compels new companies to develop their own distinctive competencies
so that they are able to compete. This is very expensive.
f) The substitute products pose a threat to the extent they are able to satisfy the same
customer needs as the differentiator’s products do, and their ability to break the brand
loyalty of customers.

Disadvantages of Differentiation Strategy:

a) The differentiator company may find it difficult to maintain its perceived uniqueness
in customers’ eyes. The competitors very soon move to imitate and copy the products
and do away the uniqueness of the differentiator. This very often happens in
computer, autos and electronic appliances.
b) Patents protection and advantages of first-moving help so long as the overall quality
of competitive products comes up to match the differentiator’s product. From this
point brand loyalty begins to fade and customers start deserting the differentiator. For
instance, American Express Company’s green, gold and platinum cards used to be
closely associated with high status and prestige. The company differentiated its
products by advertising its exclusivity and uniqueness and charged a premium price.
Nama : Dedy Mulyadi Mujianto
Nim : 21702009
Akuntansi Semester VI
During 1990s American Express’ differentiation strategy suffered a setback as
competitor companies like MasterCard and Visa demonstrated that their cards could
be used at locations where American Express cannot. Not only high-income group but
also the common consumers could avail many other benefits of using their particular
credit cards. Several banks and many other companies like AT&T and CM brought
their own credit cards. The emergence of so many competitive products has broken
the loyalty of Am. Express’ customers and faded cards’ uniqueness.
c) Another problem of the differentiation strategy lies with the ease with which
competitors can imitate a differentiator’s product. The easier it becomes for the
competitors’ to imitate, the more difficult it is for the differentiator to charge a
premium price.
d) When differentiation of the product is based on the design or physical features of the
product, it is far easy to imitate, and the greater is the risk for the differentiator. For
example, for the products like VCRs, stereos and cigarettes the customers are price
sensitive, the significance of differentiation diminishes very soon as the company
wishes to charge a premium price.
e) If the quality of service provided or reliability or any other intangible source is the
basis of differentiation like the prestige of a Rolex or BMW or Cheverlet, the
imitation of intangibles is much more difficult and that makes a company more
secure. Consequently, the differentiator can take advantage of the differentiation for a
long time.
5. Most strategic alliances are temporary because the environmental of industry cannot be
predictable. Some alliances are very short-term, only lasting long enough for one partner
to establish a beachhead in a new market. Over time, conflicts over objectives and control
often develop among the partners. For these (and other reasons), between 30-50% of all
alliances perform unsatisfactorily.