Strategic Management

Submitted by :Simranjeet kaur

Submitted to: Dr. Jyotsna sharma
22-MBA-015
 Strategic Management
• A strategy is derived from a Greek wordstrategos ,which
means generalship related to pursuing those activities which
move an organization from itscurrent position to a desired
future state.
• A tactic is a sub- strategy. It is an operating plan detailing how a
strategy is tobe implemented in terms of whenandwhereit is to
be put into action.
• Tactics are narrower in their scope and shorter in their time
horizon than are strategies.
• Here we will be considering two tactics of Timing (when) and
Market location(where) used in formulating and implementing
business strategies.
 Time Tactics
Timing refers to the order in which a firm makes market moves in
relation to its competitors. A firm may choose to be first in the market
with a product or new features to an existing product. This is known as a
first mover tactic. Usually a firm that employs this tactic is a market
leader with an established acceptance of its brand.
• The recognition of time as a strategic weapon and a source of strategic
advantagecame about in the late 1980s as a result of idea proposed by
George Stalk Jr. headof innovation and marketing at the Boston
Consulting Group.
• Whento make a business strategy is as important as what move to make.
Timingof the application of a business strategy becomes important.
• A business strategy of low cost, differentiation or focus may be
essentially a rightmove, but only if it is made at the right time.
 First Movers
• The first company to manufacture and sell a new
product or service is called thepioneer or the first
mover organization.
• For example :- Parle, which was the first mover in
the mineral water industry in
• India that has attracted brands and companies such
as Coca Cola’s Kinley, PepsiCompany’s Aquafina etc.
 Late Movers
• The organizations which enter the industry subsequently are
late moverorganizations and can snatch market share from the
first mover.
• Late movers can overcome advantage of first movers for
example:- UTI was thefirst mover but Kotak Mahindra give stiff
challenge to it.
• For the late movers imitation can be difficult and risky.
• Late movers face lesser risks when the markets are developed.
• Late movers can imitate technological advances, skills, know -
how and marketingapproaches early negating the advantage
that first movers are likely to have.
 Market Location Tactics
• Market Location Tactics are employed as responding moves to competitor’s
initiating tactics. They can also be viewed as competing inside or outside the
current market position. A notable Market Location Tactics is the Offensive
Tactic where a competitor’s initiating tactic be it by way of an advertising
campaign or a price promotion is met by an overwhelming response in Sales or
Marketing.
• This aspect deals with the issue of where to compete. It means the target market
theorganization aims at in applying its business strategies.Market location could
be classified according to the role that organizations play in thetarget market and
the type of business tactics they adopt to play such a role.Market location tactics
could be of four types :-
• Market Leader
• Market challenger
• Market follower.
• Market nichers
 Market Leaders
• These are the organizations that have the largest market share in the
relevantproduct market and usually lead the industry in factors such
as technologicaldevelopments, product and service attributes,
price benchmarks or distributionchannel design.
• In order to take up the market leader position and to retain it, Kotler
proposesthese three strategies:-
• Expanding the total market through new users, new uses and more
usage.
• Defending the market share through position defensive actions.
• Expanding the market share through enhancement of operational
effectivenessby means such as new product development raising
manufacturing efficiency,improving product quality, providing super
support services and increasingmarketing expenditures.
 Market Challengers
• These are the organizations that have the second or
lower ranking in the industry.These organizations can
either challenge the market leader or choose to
followthem.
• The tactics adopted by the market challenger has several
components:-
• The challenger has to define the objectives and
the opponents.
• Choose a general attack strategy.
• Choose a specific attack strategy.The most common
objective of the challenger is increasing the market share.
 Market Followers
• These are the organizations that imitate the market leaders but
do not upset thebalance of competitive power in the industry.
• They prefer to avoid direct attack, keep out of the way of other
organizations andreap the benefits of the innovations made by
the market leaders throughimitation.
• Four broad approaches are:-
• Counterfeiter strategy
• Cloner strategy
• Imitator strategy
• Adapter strategy
 Market Nichers
• These are the organizations that carve out a distinct niche
that is left uncovered bythe other organizations in the
industry or a niche that is of little or no interest toothers.
• They target a market position which is small and unique
and require specialcompetencies in order to be served.
• They excel in providing a special product or
service attribute, serving a distinctgeographical area or
offering a customized product or service to a select group
of customers.
• Market niche strategies carry a risk.
 Industry Life Cycle
• The Industry Life Cycle One of the best-known and
most enduring marketing concepts is the product life
cycle. Products are born, their sales grow, they reach
maturity, they go into decline, and they ultimately
die. If products have life cycles, so too do the
industries that produce them. The industry life cycle
is the supply-side equivalent of the product life cycle.
To the extent that an industry produces a range and
sequence of products, the industry life cycle is likely
to be of longer duration than that of a single product.
Industry Life Cycle
 Industry Life Cycle Phases

Introduction Phase
• The introduction, or startup, phase involves the
development and early marketing of a new product
or service. Innovators often create new businesses to
enable the production and proliferation of the new
offering. Information on the products and industry
participants are often limited, so demand tends to be
unclear. Consumers of the goods and services need
to learn more about them, while the new providers
are still developing and honing the offering.
 Growth Phase

• Consumers in the new industry have come to understand the

value of the new offering, and demand grows rapidly. A handful of
important players usually become apparent, and they compete to
establish a share of the new market. Immediate profits usually are
not a top priority as companies spend on research and
development or marketing. Business processes are improved, and
geographical expansion is common. Once the new product has
demonstrated viability, larger companies in adjacent industries
tend to enter the market through acquisitions or internal
development.
 Maturity Phase

• The maturity phase begins with a shakeout period,

during which growth slows, focus shifts toward expense
reduction, and consolidation occurs. Some firms achieve
economies of scale, hampering the sustainability of
smaller competitors. As maturity is achieved, barriers to
entry become higher, and the competitive landscape
becomes more clear. Market share, cash flow, and
profitability become the primary goals of the remaining
companies now that growth is relatively less important.
Price competition becomes much more relevant as
product differentiation declines with consolidation.
 Decline Phase

• The decline phase marks the end of an industry's

ability to support growth. Obsolescence and evolving end
markets negatively impact demand, leading to declining
revenues. This creates margin pressure, forcing weaker
competitors out of the industry. Further consolidation is
common as participants seek synergies and further gains
from scale. Decline often signals the end of viability for
the incumbent business model, pushing industry
participants into adjacent markets. The decline phase can
be delayed with large-scale product improvements or
repurposing, but these tend to prolong the same process.
Thank You