Strategies for Mature and Declining Markets

Question 1

4 Strategic Traps during Transition to Maturity

Answer 1

1. Failure to anticipate transition from growth to maturity
2. No clear competitive advantage as growth slows
3. Assumption that an early advantage will insulate the firm from price or service competition
4. Sacrificing market share in favour of short-run profit

Question 2

2 strategic Actions for Success in Market Maturity

Answer 2

1. development of a well implemented business level strategy to sustain competitive advantage, customer satisfaction, and loyalty
2. flexible and creative marketing strategies geared to pursue growth or profit opportunities as conditions change in specific product-markets

Question 3

Firms in Maturity make Strategic Choice

Answer 3

Operational excellence, product leadership, understanding customer needs.
OR
Better products, services or cheaper ones (Porter)

Question 4

Methods of Low-cost position

Answer 4

1. No-Frills (Ryanair)
2. Innovative product design (Ikea)
3. Cheaper raw materials
4. Innovative production processes (Dell)
5. Low cost Distribution (Xiaomi)
6. Reduction in overhead

Question 5

3 Approaches to Mature Markets

Answer 5

1. maintain market share
2. extend growth of brand (increase penetration, extended use, market expansion)
3. expand product market overall

Question 6

Factors affecting attractiveness of declining market

Answer 6

1. conditions of demand
2. exit barriers
3. rivalry determinants

Question 7

Strategies for declining markets:

Answer 7

1. Harvesting - increase margins at expense of market share
2. Maintenance - maintain market share at expense of margins
3. Profitable Survivor - increase share of declining market, encourage others to leave
4. Niche - strengthen share in segment

Question 8

Customer Satisfaction tools should measure:

Answer 8

1. customer expectations and preferences of product dimensions
2. perceptions concerning how well firm meets expectations