StrategicManagement:TheCaseofSOEElectric

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Business-Level Strategy

SOE Electric and Machinery Co., Ltd is the successful private and Myanmar national

owned leading company in manufacturing, distribution and power transformers. In

Myanmar, there is a small market size for the transformer without the public sector because

there is only industrial zone, shopping mall and private hospital which are used the private

own transformer by directly buy from the manufacturers. Therefore it is very difficult for

making the market segmentation in the transformer market. Therefore it can be said that

SOE Electric covered the whole transformer market in Myanmar.

Companies pursue a business-level strategy to gain a competitive advantage that

allows them to outperform rivals and achieve above-average returns. Among three basic

generic competitive approaches which are cost leadership, differentiation and focus, SOE

Electric choose focus strategy especially focused differentiation. There are so many

manufacturers who produced the high voltage or low voltage products in Myanmar.

However SOE Electric doesn’t enter into the other products area and they only emphasize

on the transformer market. Therefore it can be said that SOE Electric is used the focus

strategy.

There are so many different kinds of transformer in local market. However most of

these products are standardized or mostly used products. Only SOE Electric can produce

the customized transformer which has higher voltage than the standardized or mostly used

products because of the focus strategy, they can concentrate on a small range of product

and that will help SOE Electric to product the innovative products. Therefore SOE Electric

provides not only the standardized or mostly used products but also the customized

products and then SOE Electric has used the differentiation strategy for the business level

strategy.

Based on the industry life cycle, SOE Electric is now in the maturity stage. Therefore

SOE Electric is tried to hold and maintain their profit. In theory, the company’s investment

strategy depends on the level of competition in the industry and the source of the

company’s competitive advantage. Therefore SOE Electric continues to invest heavily in

maintaining the company’s competitive advantage by making R&D for the better electric

products and process. On the other hand, for the profit, they also try to export their products

to the other countries to maintain their profit level.

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StrategicManagement:TheCaseofSOEElectric

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Because of the focused differentiation, the company gets a chance to develop the

brand loyalty from the customers. Moreover because of the company offers the buyers a

unique product, the company can pass on price increases to customers and customers are

willing to pay the premium price. And then the company can prevent the threat of substitute

products because it is difficult for the competitors’ products to meet the same customer’s

needs. And the company gets power over its buyers because they cannot get the same

thing from anyone else. Then the company can stays close to its customers and to respond

to their changing needs.

On the other hand, the competitors can easily imitate the features and services of

the company’s products. Moreover the competitors can entry into this market segment. And

then because of the premium price, it can make the buyers to pay more cost. If there is

technological change or changes in consumers’ tasters, SOE Electric’s market can

suddenly disappear.

In conclusion, the business strategy, focused differentiation, is the best and suitable

for them. Nowadays there are few competitors in this market. However because of the

business level strategy the company used, they can still hold their market share and control

the profit level. On the other hand, the disadvantages of this strategy can make the

weakness for the company. Therefore the company should think about it and find the ways

to solve this problem.

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