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c ë
: The increased standardization that
accompanies maturity assists the exploitation of scale economies.
c j
: Excess overhead costs in mature firms can be
pervasive and institutionalized and their elimination may require
³shock therapy.´
c Although cost efficiency may not always provide competitive advantage, cost
inefficiency can be fatal.
c !
: aggressive cost reduction through
reduction of excess capacity; halting investment in equipment;
cutbacks in R&D, marketing, inventory, etc.
c
: refocusing on profitable
segments and core competencies.
c è
: minor rather than major
adjustments; a combination of the above.
c Even unattractive industries may offer profitable niche markets. Not only
do growth rates of demand vary between segments, but the structure of
segments with regard to concentration, buyer power, and potential for
differentiation varies considerably.
c This may allow firms to target attractive customers and transform less
valuable customers into more valuabInnovation:
c Innovation:
c Adding products and services that perform new but related functions
(Arco, B&N)
c Organizational Inertia
c Competency Traps
c Industry recipes
c ³Somewhere out there there¶s a bullet with your company¶s name on it.
Somewhere out there is a competitor, unborn and unknown, that will render your
strategy obsolete.´
c The past two decades have seen growing unpopularity with bureaucracy (even in
mature industries):
c New process technologies (CIM and automation increase the need for job
flexibility)
c Org forms in emerging and mature industries are closing the gap.
c The key features of declining industries are:
c Excess capacity
c Declining number of competitors, but some entry as new firms get assets
³on sale.´
c The ease with which capacity can be adjusted to declining demand depends
upon:
c Barriers to exit:
c Asset specificity
c Single product
c Leadership:
c Harvest:
c Divest: