Although strategic groups tend to be rigid, they are by no means fixed. One of t

Question

• Although strategic groups tend to be rigid, they are by no means fixed. One of the things managers have to be aware of is which firms may change group membership. With the results from Year 13 of the simulation, consider the following:
  • Why do firms tend to cluster into strategic groups?
  • Would it not make sense for firms to spread out across strategic spaces? Why or why not? Explain your rationale.
  • How likely is it that firms competing in other strategic groups will adapt their strategy to compete directly against you? Explain your rationale.
  • Which firms currently not in your strategic group would be most likely to try and enter your group? Why?
• Firms also sell in the Internet markets and have to coordinate the Internet marketing strategy with the branded marketing strategy.
  • How do firms that are successful in the Internet market balance their sales there with those in retail markets?
  • Is there any evidence showing firms that emphasize the Internet channel are being hurt in the retail channel and vice versa? Support your answer with examples.
  • A firm has to market an athletic shoe product line that it orders from its factories. Which decisions on the Production and Labor screens are critical to coordinate with the firm's marketing strategy? Why?

• Although strategic groups tend to be rigid, they are by no means fixed. One of the things managers have to be aware of is which firms may change group membership. With the results from Year 13 of the simulation, consider the following:
  • Why do firms tend to cluster into strategic groups?
  • Would it not make sense for firms to spread out across strategic spaces? Why or why not? Explain your rationale.
  • How likely is it that firms competing in other strategic groups will adapt their strategy to compete directly against you? Explain your rationale.
  • Which firms currently not in your strategic group would be most likely to try and enter your group? Why?
• Firms also sell in the Internet markets and have to coordinate the Internet marketing strategy with the branded marketing strategy.
  • How do firms that are successful in the Internet market balance their sales there with those in retail markets?
  • Is there any evidence showing firms that emphasize the Internet channel are being hurt in the retail channel and vice versa? Support your answer with examples.
  • A firm has to market an athletic shoe product line that it orders from its factories. Which decisions on the Production and Labor screens are critical to coordinate with the firm's marketing strategy? Why?

Explanation / Answer

As strategic groups are clusters of firms that share similar strategies, rivalry tends to be strong among firms that are more similar to each other than to competitors in other strategic groups within the same industry. Categorizing firms into a set of strategic groups in an industry is very useful for a understanding of the competitive environment. Strategic groups can generally be ranked in a rough hierarchical order built on two dimensions, price and performance. Each jump in price tends to bring a corresponding jump in some dimension of performance. Most companies focus on improving their competitive position within a strategic group. The key to creating new market space across existing strategic groups is to understand what factors determine buyers’ decisions to trade up or down from one group to another. A strategic group is defined as "a set of firms competing within an industry on the basis of similar combinations of scope and resource commitments" dependent, strategic investments in information and technology acquired to develop factor market imperfections and isolating mechanisms are at the heart of strategic group formation. Firms making similar commitments develop similar competitive resources, pursue similar customers and environmental opportunities in similar ways, and form strategic groups. Companies usually either target a large segment with many people in it or focus on a niche segment, which will have fewer people in it, but who they can serve well. Many will try to meet the needs of several segments, but primarily they are aiming for a manageable number of segments with a good number of customers. Online retailers must recognize and appreciate the unique (and enormous) value of quality in-store experiences. Connecting with customers in-person is invaluable –if you do it well. Online retailers can broaden their appeal by offering intelligent marketing and creating a true omni-channel customer experience. For retailers deciding how to allocate marketing spend, the debate is becoming increasingly complicated. How much should you spend online? How much should you spend offline? Here’s my advice. Leverage your data so you know your customers. Track your progress. Analyze your results. Successful marketing is well-planned marketing, and more and more these days, good planning requires optimizing a mix of online and offline tactics. Internet channel, we study the introduction of a retail storeand find evidence of cross -channel synergy, as the presence of a retail store increases demand in the catalog and Internet channels over time Example:As new technologies opened new paths to market, the practice of multichannel retailing greatly expanded. Retailers like Wal-Mart opened e-commerce websites to supplement their brick-and-mortar stores, and retailers like Dell began moving into the shopping mall. Today, there is an increasing sentiment among retailers that a multichannel presence creates synergy, with stores acting as billboards for the brand, catalogs providing enticing reminders to buy, and the Internet providing an ever-present storefront. Despite the explosion of multichannel retailing in practice, the academic literature has yet to develop a broad theory of how channels work together, and empirical evidence of cross-channel synergy has yet to be documented Deciding on superior materials usage. If a strategy involved low quality, the percentage of superior materials usage would be lower than a firm looking for high quality. Deciding on the number of models/styles to include in the production line. If a strategy involved low models, the firm would offer a lower number of models than a firm that has a high model strategy. Offering lower models means less productivity and labor costs.Deciding how much to spend for enhanced styling and features. The styling and features component is important because the firm needs to offer current styles so sales are made Production capacity immediately by purchasing used footwear-making equipment — see the “Plant Capacity for Sale” box on your Corporate Lobby screen. More details for purchasing used plant capacity are provided in the next to last section of this Help screen and also from the underlined blue links in the “Plant Capacity for Sale”. The cost-saving benefits vary quite significantly from plant to plant and also according to the production strategy for each plant. For example, it is far less cost effective to institute plant upgrade option D at plants where compensation per worker and labor costs per pair are already low as compared to plants where compensation per worker and labor costs per pair are much higher

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.