By Samer H Skaik Introduction Strategic thinking has engaged the brains of business leaders for centuries. Many books and researches have been developed to cover the strategy subject because of its importance.
Rivalry In the traditional economic model, competition among rival firms drives profits to zero. But competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms strive for a competitive advantage over their rivals.
The intensity of rivalry among firms varies across industries, and strategic analysts are interested in these differences.
The Concentration Ratio CR is one such measure. The CR indicates the percent of market share held by the four largest firms CR's for the largest 8, 25, and 50 firms in an industry also are available.
A high concentration ratio indicates that a high concentration of market share is held by the largest firms - the industry is concentrated. With only a few firms holding a large market share, the competitive landscape is less competitive closer to a monopoly.
A low concentration ratio indicates that the industry is characterized by many rivals, none of which has a significant market share.
These fragmented markets are said to be competitive. The concentration ratio is not the only available measure; the trend is to define industries in terms that convey more information than distribution of market share.
If rivalry among firms in an industry is low, the industry is considered to be disciplined. This discipline may result from the industry's history of competition, the role of a leading firm, or informal compliance with a generally understood code of conduct.
Explicit collusion generally is illegal and not an option; in low-rivalry industries competitive moves must be constrained informally. However, a maverick firm seeking a competitive advantage can displace the otherwise disciplined market.
When a rival acts in a way that elicits a counter-response by other firms, rivalry intensifies. The intensity of rivalry commonly is referred to as being cutthroat, intense, moderate, or weak, based on the firms' aggressiveness in attempting to gain an advantage.
In pursuing an advantage over its rivals, a firm can choose from several competitive moves: Changing prices - raising or lowering prices to gain a temporary advantage. Improving product differentiation - improving features, implementing innovations in the manufacturing process and in the product itself.
Creatively using channels of distribution - using vertical integration or using a distribution channel that is novel to the industry. For example, with high-end jewelry stores reluctant to carry its watches, Timex moved into drugstores and other non-traditional outlets and cornered the low to mid-price watch market.
Exploiting relationships with suppliers - for example, from the 's to the 's Sears, Roebuck and Co.Aug 08, · Think tanks are seen as independent, but their scholars often push donors’ agendas, amplifying a culture of corporate influence in Washington.
Practising Law Institute, PLI, is a nonprofit learning organization dedicated to keeping attorneys and other professionals at the forefront of knowledge and expertise through our Continuing Legal Education Programs, Webcasts and Publications. The Link Between Strategic Management And Leadership - Explain the link between strategic management and leadership.
To elucidate the connection among strategic management and leadership a strong understanding of anything these two rapports really mean is necessary.
One Response to “Implementing Strategic Management in Construction” Kristeen Savells Says: July 14th, at pm. Assessing the cash flow is another important element in the company strategy format, so as to sustain a normal money flow to meet the essential capital needs.
Strategic Management of Wal-Mart - Introduction Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in , Bentonville in Arkansas which is also the headquarters of Wal-Mart.
Wal-Mart operates locally as well as worldwide. Making Good Strategic Decisions. Para mis visitantes del mundo de habla hispana, este sitio se encuentra disponible en español en: Versión en Español Sitio Espejo para América Latina. Decision-Making is central to human activity.