INDUS1kSLCIIIC

S1kA1LG
HunI Sovuyu ALmud sB004?5
A!kLu!dI SLvouq Abdu!!uL sB04110
1
JA1 IS INDUS1kIAL S1kA1LG
1oo| that |ntegrates |ntervent|ons |ndustry's v|s|on by laylng
ouL a sequence of observaLlons expecLed from value chaln
acLors engaged ln upgradlng
JA1 IS AN INDUS1k SLCIIIC S1kA1LGILS
DLIINI1ICN
ndusLrlal sLraLegy ls a Lerm LhaL generally refers Lo any aLLempL by governmenL Lo
apply a coherenL and conslsLenL seL of pollcles LhaL are deslgned Lo lmprove Lhe
performance of Lhe LCCnCM? 1hese pollcles are frequenLly dlrecLed aL Lhe
manufacLurlng secLor buL an lndusLrlal sLraLegy could also cenLer on Lhe performance
of a number of oLher secLors ln Lhe economy ranglng from resource producLlon Lo
servlces ndusLrlal sLraLegles are orlenLed Lowards correcLlng lmbalances ln Lhe
economys performance and lnvolve Lhe assumpLlon by governmenL of a promlnenL
role ln faclllLaLlng or effecLlng economlc change SomeLlmes Lhe means deployed are
very dlrecL (whaL ls now called lnLervenLlonlsL) buL aLLempLs Lo resLrucLure an
economy can be underLaken uslng a lalssezfalre freemarkeL approach

JA1 IS AN INDUS1kSLCIIIC S1kA1LG?

IS a strategy
for movlng an lndusLry Lo susLalned growLh
can have shorL medlum and longLerm Llme frame
can lnclude mulLlple markeLs
can lnvolve small rlskable sLeps Loward susLalned growLh
IS NC1 IUS1 a strategy for he|p|ng |nd|v|dua| firms
become mote ptofltoble
to occess oew motkets
to occess book flooocloq
lts o stroteqy for on industry industry
#
"

nuuS18? S18A1LC?
CCML1I1IVL ANALSIS INDUS1k S1kA1LG
CCnuuC1Lu 8? vC LxL81S 8LLCnCS 1C nuuS18?
LA?L8S
WPCSL S18A1LC? S 1PS An?WA??
4
Jh|ch d|rect|on?
WP? S An nuuS18? S18A1LC?
MC81An1?
Jy is o stroteqy importont?
5toqnoncy? 6rowt?
5
It |s too r|sky
to change
nuuS18? S18A1LC?
@e stroteqy needs to oddress systemic constroints
1hey don't
understand |t!

e's not ||ke us

nuuS18? S18A1LC? n A CS1CCnlLC1
Lnv8CnMLn1
@e stroteqy needs to oddress systemic constroints
1hey don't
understand |t!
?
Jy is on industry opprooc importont?
CCLLA8C8A1Cn An nuuS18?
S18A1LC??
5toqnoncy 6rowt
B
S1kA1LG C1ICNS
ICk CCML1ING IN
1LS CI INDUS1kILS
Lmerg|ng
Industr|es
|gh ve|oc|ty
markets
Mature
Industr|es
Iragmented
Industr|es
Deregu|at|ng
Industr|es
Stagnant]
Dec||n|ng
Industr|es
ypercompet|t|ve

I!ST!Y C!OWTH STACI

10
Wln early race for lndusLry leadershlp by employlng a o/d
creotive stroteqy
ush hard Lo perfecL tecno/oqy lmprove product quo/ity
and develop aLLracLlve performonce feotures
,ove quick/y when Lechnologlcal uncerLalnLy clears and a
dominont tecno/oqy emerqes
lorm stroteqic o//ionces wlLh key suppllers or Companles
havlng relaLed Lechnologlcal experLlse
S1kA1LG C1ICNS ICk CCML1ING IN LMLkGING INDUS1kILS
S1kA1LGILS 1C CCML1L IN LMLkGING INDUS1kILS S1kA1LGILS 1C CCML1L IN LMLkGING INDUS1kILS
11
lnvest aggresslvely ln
uevelop quick response copoi/ities
ShlfL resources
AdapL compeLencles
CreaLe new compeLlLlve capablllLles
Speed new producLs Lo markeL
use stroteqic portnersips Lo develop
speclallzed experLlse and capablllLles
nlLlaLe fres octions every few monLhs
keep products/services fres and excitinq
S1kA1LG C1ICNS ICk CCML1ING IN IG VLLCCI1 MAkkL1S
S1kAGILS 1C CCML1L IN LMLkGING INDUS1kILS S1kAGILS 1C CCML1L IN LMLkGING INDUS1kILS
1
S1kA1LG C1ICNS ICk CCML1ING IN LMLkGING INDUS1kILS
New and unproven markeL
roprleLary techno|ogy
Low entry barrlers
Lxperlence curve effecLs may permlL cosL reducLlons as volume
bullds
uyers are f|rstt|me users and markeLlng lnvolves |nduc|ng
|n|t|a| purchase and overcom|ng customer concerns
I|rstgenerat|on products are expecLed Lo be rapldly lmproved
so buyers delay purchase unLll Lechnology maLures
oss|b|e d|ff|cu|t|es ln secur|ng raw maLerlals
llrms strugg|e Lo fund 8u operaLlons and bulld resource
capablllLles for rapld growLh
ILA1UkLS CI AN LMLkGING INDUS1k ILA1UkLS CI AN LMLkGING INDUS1k
1
ST!ATICY OITIOS IO! COMIITIC
I HICH VI!OCITY MA!KITS
1nteot nggrossIvoIy In R&D
ovoIo quick reoponoe cupuhilitieo
O ShIff rosourcos, Adnf comofoncIos, Cronfo now
comofIfIvo cnnbIIIfIos, Sood now roducfs fo mnrkof
!so otrutegic purtnerohipo fo dovoIo socInIIzod
oxorfIso nnd cnnbIIIfIos
InIfInfo 1reoh uctiono ovory fow monfhs
Koo producto/oerticeo 1reoh nnd erciting
14
8apldflre Lechnologlcal change
ShorL producL llfecycles
LnLry of lmporLanL new rlvals
lrequenL launches of
new compeLlLlve moves
8apldly evolvlng
cusLomer expecLaLlons
S1kA1LG C1ICNS ICk CCML1ING IN IG VLLCCI1 MAkkL1S
ILA1UkLS CI IG VLLCCI1 MAkkL1S ILA1UkLS CI IG VLLCCI1 MAkkL1S
15
9rune marglnal producLs and models
Lmphaslze innovotion ln Lhe vo/ue coin
SLrong focus on cost reduction
lncreose so/es Lo presenL cusLomers
9urcose rivo/s aL bargaln prlces
Lxpand internotiono//y
8ulld new more f/exi/e competitive copoi/ities
S1kA1LG C1ICNS ICk CCML1ING IN MA1UkL INDUS1kILS
S1kAGILS 1C CCML1L IN MA1UkL INDUS1kILS S1kAGILS 1C CCML1L IN MA1UkL INDUS1kILS
1
Slowlng demand breeds sLlffer compeLlLlon
More sophlsLlcaLed buyers demand bargalns
CreaLer emphasls on cosL and servlce
1opplng ouL" problem ln addlng producLlon capaclLy
roducL lnnovaLlon and new end uses harder Lo come by
nLernaLlonal compeLlLlon lncreases
ndusLry proflLablllLy falls
Mergers and acqulslLlons reduce number of lndusLry
rlvals
S1kA1LG C1ICNS ICk CCML1ING IN MA1UkL INDUS1kILS
ILA1UkLS CI MA1UkL INDUS1kILS ILA1UkLS CI MA1UkL INDUS1kILS
1?
Lmploylng a hohum sLraLegy wlLh no dlsLlncLlve feaLures
Lhus leavlng flrm #stuck in te midd/e"
concentrotinq on sortterm proflLs raLher Lhan
sLrengLhenlng longLerm compeLlLlveness
einq s/ow Lo odopt competencies Lo
changlng cusLomer expecLaLlons
einq s/ow Lo respond Lo pricecuttinq
ovinq Loo much excess copocity
verspendinq on morketinq
oi/inq Lo pursue cost reductions aggresslvely
S1kA1LG C1ICNS ICk CCML1ING IN MA1UkL INDUS1kILS
SLraLeglc lLfalls ln a MaLurlng ndusLry SLraLeglc lLfalls ln a MaLurlng ndusLry
1B
|
1
IC!IIC I!ST!IIS
8easons for and severlLy of Lhe decllne
O 8easons Lechnologlcal change soclal Lrends demographlc shlfLs
O nLenslLy of compeLlLlon ls greaLer when
1he decllne ls rapld versus slow and gradual
1he lndusLry has hlgh flxed cosLs
1he exlL barrlers are hlgh
1he producL ls percelved as a commodlLy
O noL all lndusLry segmenLs Lyplcally decllne aL Lhe same raLe
teotloq pockets of JemooJ
SLraLegles
O Leadershlp seeks Lo become domlnanL player ln decllnlng lndusLry
O nlche focuses on pockeLs of demand LhaL are decllnlng more slowly
O ParvesL opLlmlzes cash flow
O ulvesLmenL sells buslness Lo oLhers
A decIining industry is one in which market demand has
leveled off or is falling and the size of total market starts to shrink.
Competition tends to intensify and industry profits tend to fall.
uemand grows more slowly Lhan economy as whole (or
even decllnes)
CompeLlLlve pressures lnLenslfy rlvals baLLle for markeL
share
1o Crow and prosper flrm musL Lake markeL share from
rlvals
ndusLry consolldaLes Lo a smaller number of key players vla
mergers and acqulslLlons
S1kA1LG C1ICNS ICk S1AGNAN1 Ck DLCLINING INDUS1kILS
S1AnuCu1 lLA1u8LS Cl A S1ACnAn1/uLCLnnC nuuS18? S1AnuCu1 lLA1u8LS Cl A S1ACnAn1/uLCLnnC nuuS18?
0
ursue focus stroteqy almed aL fasLesL growlng markeL
segmenLs
SLress differentiotion based on quallLy lmprovemenL or
producL lnnovaLlon
Work dlllgenLly Lo drive costs down
CuL marglnal acLlvlLles from value chaln
use ouLsourclng
8edeslgn lnLernal processes Lo explolL ecommerce
ConsolldaLe underuLlllzed producLlon faclllLles
Add more dlsLrlbuLlon channels
Close lowvolume hlghcosL dlsLrlbuLlon ouLleLs
rune marglnal producLs
S1kA1LG C1ICNS ICk CCML1ING IN A S1AGNAN1 Ck DLCLINING INDUS1kILS
1
CeLLlng embrolled ln a proflLless baLLle for markeL share
wlLh sLubborn rlvals
ulverLlng resources ouL of buslness Loo qulckly
8elng overly opLlmlsLlc abouL lndusLry's fuLure (bellevlng
Lhlngs wlll geL beLLer)
S1kA1LG C1ICNS ICk CCML1ING IN A S1AGNAN1 Ck DLCLINING INDUS1kILS
1L S1kA1LGIC MIS1AkLS 1L S1kA1LGIC MIS1AkLS 1L S1kA1LGIC MIS1AkLS 1L S1kA1LGIC MIS1AkLS

S1kA1LG IN IkAGMLN1LD INDUS1kILS

Iragmented |ndustr|es no company or group has
enough markeL share Lo affecL lndusLry sLrucLure or
ouLcomes
1o Lhrlve ln Lhese markeLs segmenL Lhe markeL based
on
O roducL cusLomer Lype of order or geographlc area
O Comblned wlLh no frllls" posLure

8ook publlshlng
Landscaplng and planL nurserles
AuLo repalr
8esLauranL lndusLry
ubllc accounLlng
Women's dresses
MeaL packlng
aperboard boxes
PoLels and moLels
lurnlLure
S1kA1LG C1ICNS ICk CCML1ING IN IkAGMLN1LD INDUS1kILS
LxAMLLS Cl l8ACMLn1Lu nuuS18? LxAMLLS Cl l8ACMLn1Lu nuuS18?
4
Absence of markeL leaders wlLh large markeL shares
8uyer demand ls so dlverse and geographlcally scaLLered LhaL many
flrms are requlred Lo saLlsfy buyer needs
Low enLry barrlers
Absence of scale economles
8uyers requlre small amounLs of cusLomlzed or madeLoorder
producLs
MarkeL for lndusLry's producL/servlce may be globallzlng Lhus
puLLlng many companles across Lhe world ln same markeL arena
Lxplodlng Lechnologles force flrms Lo speclallze [usL Lo keep up ln
Lhelr area of experLlse
ndusLry ls young and crowded wlLh asplrlng conLenders wlLh no
flrm havlng yeL developed recognlLlon Lo command a large markeL
share
S1kA1LG C1ICNS ICk CCML1ING IN IkAGMLN1LD INDUS1kILS
CCML1I1IVL ILA1UkLS CI A IkAGMLN1LD INDUS1k CCML1I1IVL ILA1UkLS CI A IkAGMLN1LD INDUS1k CCML1I1IVL ILA1UkLS CI A IkAGMLN1LD INDUS1k CCML1I1IVL ILA1UkLS CI A IkAGMLN1LD INDUS1k
5
ConsLrucL and operaLe #formu/o" foci/ities
8ecome a /owcost operaLor
5pecio/ite by product Lype
5pecio/ite by customer Lype
locus on /imited qeoqropic area
S1kA1LG C1ICNS ICk CCML1ING IN IkAGMLN1LD INDUS1kILS

CSI1ICN CAkAC1LkIS1ICS S1kA1LGILS

ndusLry leaders SLrong Lo powerful markeL poslLlon
Wellknown repuLaLlon
roven sLraLegy
key sLraLeglc concern ow to sustoin
dominont /eodersip position
SLayonLheoffenslve sLraLegy
lorLlfyanddefend sLraLegy
Muscleflexlng sLraLegy
8unnerup flrms ,orket co//enqers
{use offenslve sLraLegles Lo galn markeL share)
ocusers
{ConcenLraLe on servlng a
llmlLed porLlon of markeL)
9erennio/ runnersup
{Lack compeLlLlve sLrengLh Lo do more Lhan
conLlnue ln Lralllng poslLlon)
When iq site provldes larger rlvals wlLh a cost
odvontoqe lack compeLlLlve sLrengLh Lo do more
Lhan conLlnue ln Lralllng poslLlon runnerup flrms
have two options
ui/d morket sore
Lower cosLs and prlces Lo grow sales or
CuLdlfferenLlaLe rlvals ln ways Lo grow sales
Jitdrow from morket
Weak or crlsls
rldden flrms
Launch an offensive turnoround stroteqy
(lf resources permlL)
Lmploy a fortifyonddefend stroteqy
(Lo Lhe exLenL resources permlL)
ursue a fostexit stroteqy
AdopL an endqome stroteqy
S1kA1LGILS ASLD CN A CCMAN'S MAkkL1 CSI1ICN
?
#u!e oI OIIensIve Stvutegy #u!e oI OIIensIve Stvutegy nd nd- -Gume Stvutegy Gume Stvutegy
ooetp fltms should avold aLLacklng a
leader headon wlLh an lmlLaLlve sLraLegy
regardless of Lhe resources and sLaylng
power an underdog may have!
SLeers mlJJle cotse beLween sLaLus quo
and exlLlng qulckly
nvolves qtoJolly soctlflcloq motket
posltloo ln reLurn for blgger oeottetm cash
flow/proflL
Cb[ect|ves
otttetm CeneraLe largesL
feaslble cash flow
ooqtetm LxlL markeL
S1kA1LGILS ASLD CN A CCMAN'S MAkkL1 CSI1ICN (JLAk AND CkSISI)
B
1ypes of Lnd 1ypes of Lnd Game Strategy Game Strategy
8educe operaLlng budgeL Lo rockboLLom
Pold relnvesLmenL Lo mlnlmum
Lmphaslze sLrlngenL lnLernal cosL conLrols
lace llLLle prlorlLy on new caplLal lnvesLmenLs
8alse prlce gradually
1rlm promoLlonal expenses
8educe quallLy ln nonvlslble ways
CurLall nonessenLlal cusLomer servlces
Shave equlpmenL malnLenance

ST#ATGY IN G#OWTH IN\ST#IS

ncreased segmenLaLlon ofLen accompanles Lhe
LranslLlon Lo markeL maLurlLy
CosL conLrol becomes an lmporLanL elemenL of sLraLegy
as unlL marglns shrlnk and new producLs and
appllcaLlons are harder Lo flnd
O rocess lnnovaLlon lmporLanL dlmenslon
CompeLlng companles LhaL enLer growLh lndusLrles are
labeled followers
0
ST#ATGY IN HYP#OMPTITIV IN\ST#IS
CharacLerlzed by lnLense rlvalry
Successful sLraLegles ofLen are based on Laklng Lhe compeLlLor
by surprlse and Lhen movlng on as Lhe compeLlLlon Lrles Lo
recover
PypercompeLlLlve MarkeLs
O 8apld lnnovaLlon and speed
O Superlor shorLLerm sLraLeglc focus
O MarkeL awareness
1
ST#ATGY IN #G\IATING IN\ST#IS
ArLlflclal consLralnLs are llfLed and new players are
allowed Lo enLer
O ueregulaLlng envlronmenLs undergo change Lwlce when
markeL ls opened and 3 years laLer
Can be good and bad for companles

ST!ATICIIS OI THI TOIACCO I!ST!Y

Why has avallablllLy and use of Lobacco conLlnued ln splLe Lhe
medlcal evldence LhaL lL ls a healLh rlsk?
a naLlon can become addlcLed Lo Lhe revenues produced by Laxes
placed upon Lobacco producLs As noLed by Lhls quoLe As an
lnsLrumenL of flnanclal pollcy Lobacco ls unlque L ls noL clear why
Lhls should be buL Lhe LradlLlon ls now well esLabllshed n facL
Lobacco has Lwo dlsLlncL funcLlons one as a consumable arLlcle and
Lhe oLher as a revenue earner whlch aL Llmes appears Lo secure
confllcLlng offlclal LreaLmenL (AkehursL 1981 p13)

Leg|t|m|ze themse|ves where they operate

O uslng corporaLe phllanLhropy
O fundlng soclally responslble" acLlvlLles
O conducLlng medla Lralnlngs"
O fundlng supporLlve research
O creaLlng/fundlng lssuesspeclflc alllances
Cvera|| 1obacco Industry Strateg|es
UNDERMINE STRONG TOBACCO CONTROL POLICIES
4
Interfere w|th po||cy mak|ng process
1hey creaLe allles and lncrease lnfluence among pollcy
maklng and regulaLory bodles by
O lobbylng
O pollLlcal fundlng
O drafLlng bllls submlLLlng commenLs
O parLlclpaLlng on commlLLees
O provldlng pollLlcal donaLlons glfLs Lrlps and perks
5
Create new users and keep ex|st|ng ones
O adverLlslng promoLlon and sponsorshlps LargeLed aL klds young people
and women
O new producL lnnovaLlons"
O expanslon lnLo emerglng markeLs
O prlclng sLraLegles