8: Strategies for new economies

Question 1

Pioneer strategy

Answer 1

Must have the financial and marketing abilities, has other products to support new product (Cashcow).

If you don’t have this, license it and sell it to someone who can execute your product

Question 2

Growth market

Answer 2

Gaining share is easier, should I gains I’m worth more, price competition is likely to be less intense, early entry is necessary to maintain technical expertise.

Risks: competitive risk (overcrowding/superior competitive entry), family imitations (resource constraints, distribution unavailable), market changes (changing KSFs, New technology, disappointing growth, price instability)

Question 3

Confrontation Strategy

Answer 3

Strategic Choices in Growth Markets- For Leaders

Competing against a competitor on what they compete on, for example low price

Question 4

Flanker strategy

Answer 4

Strategic Choices in Growth Markets- For Leaders

Attack competition on the vulnerable side/not what they are positioned on for example, environment.

For example: Singapore airlines with flanker attacked for high price, in response they developed Tiger air. This was a flanker response.

Question 5

Market expansion

Answer 5

Strategic Choices in Growth Markets- For Leaders

Leader going into new markets

Question 6

Contraction/withdrawal

Answer 6

Strategic Choices in Growth Markets- For Leaders

Market changed too much so contract (IBM)

Question 7

Fortress Strategy (defensive)

Answer 7

Strategic Choices in Growth Markets- For Leaders

Create barriers to exit (cancellation fee, contracts)

Question 8

Flanker attack

Answer 8

Strategic Choices in Growth Markets- For Followers/Challengers

Question 9

Frontal attack

Answer 9

Strategic Choices in Growth Markets- For Follwers/challengers

Follower confrontation strategy

Question 10

Encirclement strategy

Answer 10

Strategic Choices in Growth Markets- For Followers/challengers

Satisfying segments of market that weren’t being satisfied/outside of main circle
For example: carbonated mineral water

Question 11

Leap frog strategy

Answer 11

Inventing technology and bypassing everyone else. For example: computer files bypassing CDs

Strategic Choices in Growth Markets- For Followers/challengers

Question 12

Internet marking pros and cons

Answer 12

Pros: target marketing,
Message tailoring, interactive capabilities, information access, sales potential, creativity, complement to IMC

Cons: measurement problems, annoyance, clutter, potential for deception, privacy, poor reach, irritation

Question 13

Emerging business model

Answer 13

Freemium

Hook and bolt - selling lots of same product

The long tail- selling lots of different products
*Amazon in exam: Master of the long tail, – You can buy anything. Lots of different products in small quantities. They don’t hold the stock, but have connection to companies who hold stock. They market a network of connections. Therefore cheap because they don’t have to hold stock.