Download - 2009 Forecast Lunch Douglas Reid
General Environment Analysis• Analyze minimum number of factors
– Economic
– Demographic
– Political/legal
– Technological
– Global
– Sociocultural
Economic
Demographic
Canada USA
China India
Political/Legal
Technological
Global
Sociocultural
Breadth of Competitive Scope
Source of Competitive Advantage
BroadTargetMarket
NarrowTargetMarket
Cost
Focused Differen-
tiation
CostLeadership
Differen-tiation
Focused Low Cost
Uniqueness
Breadth of Competitive Scope
Source of Competitive Advantage
BroadTargetMarket
NarrowTargetMarket
Cost
Focused Differen-
tiation
CostLeadership
Differen-tiation
Focused Low Cost
Uniqueness
Cost Leadership -- Definition
Characteristics of Low Cost Competitor
• Cost conscious organizational culture
• Spartan facilities
• Limited perks and frills for executives
• Intolerance of waste
• Intensive screening of budget requests
• Employees enlisted in cost control efforts
Breadth of Competitive Scope
Source of Competitive Advantage
BroadTargetMarket
NarrowTargetMarket
Cost
Focused Differen-
tiation
CostLeadership
Differen-tiation
Focused Low Cost
Uniqueness
AlignmentARENAS• Inexpensive, contemporary furniture• Young, white-collar customers• Worldwide
VEHICLES• Organic expansion• Wholly-owned stores
DIFFERENTIATORS• Very reliable quality• Low price• Fun, non-threatening shopping experience• Instant fulfillment
STAGING• Rapid international expansion, by region• Early footholds in each country, fill in later
ECONOMIC LOGIC• Scale (global, regional, and individual store)• Efficiencies from replication
Round or Flat?
Research
Source: Rugman,, 2005; Ghemawat, 2007; Reid, 2008