Business Strategy

Business strategy to gain competitive advantage

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We’re going to look at the difference between corporate and business strategy. The two terms are often used interchangeably, but they do have some significant differences – understanding those differences is important as it determines where and how you’re going to compete.
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As we look across the business landscape of 2016, we see many companies with multiple business units in operation, often running in different profit markets.Click here to read more.

Vertical integration is where a company launches into one product market, but competes along multiple pieces of the supply chain. They can do this through backward integration and forward integration. Backward integration is where a company chooses to make its own components. For example, Dell may choose to create their own hard drives or disk drives, taking control of the component manufacture. Click here to read more.

In the previous post, we talked about Disney and their related diversification strategy. That is, moving into markets that have some relevance to your core business, enabling you to build synergy and economies of scope between your business units. Click here to read more.

Before we get down to the detail of this article, let’s think about Daimler’s merger with Chrysler for 36 billion dollars. Only a few years after the merger completed, Daimler had failed to realise the expected synergies with the Chrysler business unit so negotiated a deal to sell 80% of Chrysler for 7 billion dollars. However, this didn’t represent the true capital loss. You see, due to the pay down of debt amongst other expenses, Daimler actually paid around 600 million dollars to drop Chrysler from their portfolio, a catastrophic failure by anyone’s standards. Click here to read more.

The industry lifecycle provides a view of the typical birth to death cycle of an industry. It has the phases: introduction, growth, maturity and decline – we will use the mobile phone market as a case study. It is worth noting that the duration of various lifecycle phases can vary across industries and geographies, for example… Click here to read more.

This is a hugely important skill as looking at the bottom line of two companies across two different industries doesn’t actually tell you a whole lot about how well / badly those companies are managed. Why? Because different industries have inherently different profitability. That is to say, some industries are just more profitable than others. Click here to read more.

In business as in war, understanding your enemy is critically important. When looking to launch into a new industry, you’ll want to understand your competitors capabilities, weaknesses, goals, economic strategy and non-economic strategy. Click here to read more.

When launching a new business, you’ll do your due diligence. This will include the research of existing players in the market and an analysis of their strengths and weaknesses. Click here to read more.

When a new entrant to a market develops an entirely new business model, we call it disruptive innovation. This business model radically changes the way that the industry had operated previously, focusing on different customer KPI’s and delivering services that customers didn’t even know they wanted. Click here to read more.

There is a quite a split in opinion between marketeers and economists as to whether first movers have an advantage over fast followers. Let’s look at that in a little detail to see if we can make a decision for ourselves. Click here to read more.

A business can gain competitive advantage by adopting one of the below strategies. It’s imperative that your business falls into one of these brackets. Generally speaking, companies that straddle between strategies struggle to succeed. Click here to read more.

As a rule of thumb, the biggest threat to market leading, differentiated companies is imitation. That is, other companies trying to do the same as you’re doing, fighting over the same customer-base. Click here to read more.