Arihant Mehta 10-IT10 Chetan Sabadra 10FN-034 Dheeraj Pandey 10FN-036 Diwakar Mandal 10IB-028 Jimmy Mehta 10IB-032

B-032 Keshav Prasad 10HR-019 Nishant Pilania 10HR-024

GM was facing tough competition from Japanese and European car makers. GM was losing its market share and Japanese were gaining ground. GM tried to increase quality of its cars and spent heavily in communicating the same. But what it failed to gauge is that product quality had become a given in the marketplace, a mere prerequisite for competing. Quality was now a "strategic minimum"--a necessary but insufficient condition for differentiation in the automobile business

Strategic Minimum is like a point of parity. It offers no unique competitive advantage, though its absence means failure. Focus on quality did not help GM in fighting onslaught of Japanese companies. As GM worked to close the quality gap the basis of competition shifted. Simply put, GM was chasing the competition rather than leading it.

Shifting Tides of Mature Industries

The changing nature of competition has upset early models of strategy, which often implied that companies competed on the basis of a single skill or capability. In theory, mastery of a single competency provides a distinct niche in the marketplace. . In practice, today's global competition appears to be far more dynamic and multidimensional than these models suggest.

Competition in a mature industry can be viewed as a cycle in which one or more firms achieve differentiation by identifying and developing a source of competitive advantage. Others must achieve parity, either by catching up on that competitive dimension or by excelling in another. The mature industry paradox: Leadership demands differentiation, yet differences are quickly copied.

When

an Industrys basis of Competition shifts, competitors gain and lose relative advantage, forcing a search for new resources of differentiation.

NyQuil example suggests, it may be more rational for a challenger to shift the basis of competiton
To

shift the basis of competition requires new competitive skills.

Anheuser Bush shifted the basis of competition in the beer industry by developing multiple competencies. Miller introduced Lite beer which a single factor challenge and hence not so unique. Anheuser Bush responded with a trio of Low calorie beers as well as developed new, multiple competencies on the distribution side. Hiring a cadre of experienced brand manager Locking in its independent distributors by having them make sizable investments in environmentally controlled warehouses Changing the sales system

Single factor innovation only tap one competency and can be easily copied by capable competitors. Multi competencies strengthen several dimension of firms competitive position and cannot be easily diluted The Goal is to strengthen competitive position by accumulating several competencies thant interact and augment each other. Being the largest Beer maker in World Anhueser Busch can achieve a single competency referred to as economies of scale Multiple competencies leads to deeply embedded synergies resulting in economies of scope

Shadow strategy task force aids managers in identifying the strategies and competencies needed to maintain or pursue industry leadership. It begins with unusual objective of identifying the strategies and underlying competencies which can be used by competitors to attack the firms competitive position. Task force should consist of small group of savvy independent thinkers. These individuals freed from thinking on:

Incremental thinking Firms conventional wisdom Financial Performance

The role of Task for is to think, either offensively or defensively, about how industrys current pattern of competetion might be shifted

Ciba Geigys Industrial dye division discovered that its customers(carpet mill) had problem with their customers(carpet outlets) A strategy emerged to engineer a process and facility that matched dyes with mathematical precision, leading Ciba Geigy to focus on manufacturing and sye research competencies Ciba Geigys competencies in pollution control, dye research and process manufacturing combined to form economies of scope in the form very precise and low polluting process To determine specific competencies a firm must identify added values that a customer seeks and this can be done by customer contact, focus group, surveys and by anticipating customers needs.

Twist: It seeks to preempt challengers by attacking itself that is, by uncovering the strategy that could undermine the leaders own current strategy. Ex: Gillette The mission of shadow strategy task force is

To seek out weakness within the leaders position To identify the mix of competencies

Task force serves as a forum for strategically important information among senior management