BUS 596 Independent Study Chapter 11~13

Chapter 11~13 Transition of Industry Maturity &, Strategy to Declining and Global Industries

Slowing growth means more competition from market and competition will become more cost and service oriented. However, the mature industries may regain their rapid growth by adjust the manufacturing, marketing and sales strategy to satisfy the needs of supplicated customers. More matured products basically will have more people understand the technology know-how and the international competition will increase. The sophisticated cost analysis will help the company to squeeze more on where it can save. Process innovation, design for manufacture and the cheap asset from the distressed company will also help on lowering down the unit cost on products. The matured company may force to make the selection on one of the following strategy alternatives – cost leadership, differentiate or focus. The company that is prided itself on pioneering and on a high quality product may find it is very unused to engage in price completion and in aggressive marketing. As the firm cling to “higher quality” as an excuse for not meeting aggressive pricing and resent to take right reaction on price competition could have further low cost position on certain market in the long run.

Strategies for the declining industries can be categorized as follow:

Targeting for leadership position in terms of market share; creating a stronger position in a particular segment; diversification and then identifying the advantage of strength, or liquidating the asset and phase out as soon as possible

Global industries are industries with organizations that make operational and production decisions based on global supply and demand and global market conditions established by integrated markets around the world. Large financial corporation, health care equipment pharmaceutical, software, semi-conductor, consumer electronics, automotive, media, and oil companies all fall into this category. The firm can tailor products to fit different circumstances among the foreign markets. The cost basis could also be different as the need to compliance to the local regulation. Globalization does provide the firm be able to manufacturing product with large economic scale from marketing perspective. In general the firm is good on global competition having good reorganization on the brand name and well organized logistic system and planning control to satisfy the need from worldwide customers. As the firm know the foreign government taxation law and incentive well, it to take the full advantage to maximize the profit margin.