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Running head: 5.4.2 Alternative Case Study Assignment

Homework Assignment 5.4.2

Alternative Case Study

Submitted to the Worldwide Campus

In Partial Fulfillment of the Requirements

For MGMT 436 Course

Jim Warnick

Embry-Riddle Aeronautical University

January 2018
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Running head: 5.4.2 Alternative Case Study Assignment

1. What industry forces might cause a propitious niche to appear or disappear?

“A Propitious Niche is an extremely favorable niche that is so well suited to the firm’s

internal and external environment that other corporations are not likely to challenge or

dislodge it”. (Wheelen, T. L., & Hunger, J. D. (2017)).

What can cause a propitious niche to appear is when there is a window of opportunity for

a company to move into with its products or services and it is just large enough that no

other firm is able to become a competitor due to financial backing or time that it would

take them to become involved. Most firms are always searching for these short slots to get

their firm into. As an old adage would say the early bird gets the worm. This is the case

when a propitious niche appears. A firm that is capable of taking advantage of the niche

can have a very prosperous effect.

What can cause a propitious niche to disappear is when a firm realizes that in order to stay

ahead of the competitors and market they need to start investing more into their

infrastructure and they are not capable of doing so.

2. What does a business have to consider when trying to follow a cost leadership

strategy and a differentiation strategy simultaneously?

“Companies that are capable of working in the grey area between both cost and

differentiation can be successful as long as they continue to monitor their efforts. If a


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Running head: 5.4.2 Alternative Case Study Assignment

company would lean towards either direction it could create a failure point. If there is

weak competition this can also cause failure and vulnerabilities within the company. If

there is a strong market cost can be a great advantage. It allows the company to repurpose

that money and redirect it into product and aid in an increase in cost leadership. A

company should always consider taking on any differentiation opportunity that they are

presented with that does not drive cost. Aside from that they should always be ready to

pick and choose the ultimate competitive advantage and look into what tradeoffs may be

associated with them”. (Warnick, 2018)

Can you name a company doing this?

A company according to our text that was unable to manage the grey area or middle

ground was Kmart. The tried to be competitive with Walmart and Target but was unable

to do so financially and entered into bankruptcy. (Wheelen, T., & Hunger, J. (2017)).

3. How can a company have a sustainable competitive advantage when its industry

becomes hypercompetitive?

In order for a company to remain competitive and maintain its sustainable competitive

advantage they need to try to keep their product costs as low as they can but still gain

profit. The profit gain needs to be substantial enough in order for them to be able to work

on improving their processes and add needed value to their products and services.
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Running head: 5.4.2 Alternative Case Study Assignment

4. Why are many strategic alliances temporary?

Most alliances only last long enough for one of the companies involved to gain the upper

hand over the other. Normally after a period of time working together one of the

companies will want to start taking claim to whatever the effort is and conflicts begin.

This is when the differences start and one company starts moving out to manage the

effort on their own.


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Running head: 5.4.2 Alternative Case Study Assignment

References

Warnick, J. E. (2018, February 11). WarnickJ_MGMT436_Week 5 Assignment 5.4.

Wheelen, T. L., & Hunger, J. D. (2017). Concepts in Strategic Management, International

Management, and Business Policy. Upper Saddle River, NJ: Pearson Prentice Hall.