2024年2月9日发(作者：k49列车阳性)

Contemporary Strategy Analysis (6th edition)

NOTES AND SUGGESTIONS ON SELF-STUDY QUESTIONS

Chapter 12. Competitive Advantage in Mature Industries

1. The clothing manufacturers of northern Italy are facing rapid decline as retail chains and fashion

houses increasingly outsource to China and other low-cost countries. What strategies would you

recommend to small and medium-sized Italian garment manufacturers to assist them in surviving the

onslaught of low-cost foreign competition?

As the section on “Competitive advantage in mature industries” (pp. 321–8) outlines, the key challenge

of maturity is commoditization and intense price competition. The entry of low-cost competitors into a

mature industry can be the death-knell for established producers. In the clothing industry, the scope for

innovation is limited; hence, the basis for competitive advantage must be based primarily on

differentiation. For manufacturers that have proprietary brand names, the potential to establish

competitive advantage based on style and quality is considerable. For manufacturers who supply the

design and marketing houses such as Armani and Prada, the challenge is greater. They must achieve a

flexibility, responsiveness, and quality orientation that offsets their high costs. Manufacturers could

also seek a stronger brand orientation around country of origin – e.g. promoting “Made in Italy” as a

statement of chicness and quality.

The alternative strategy for Italian manufacturers is to join rather than fight low-cost producers. Italian

garment producers could retain design and certain finishing activities in their home country while

transferring most manufacturing activities to China or other low-cost locations.

2. Under Jacques Nasser, Ford’s response to intensifying competition in the auto industry was to acquire

a stable of luxury brands and forward integrate into car rental (Hertz), car repair (Kwik Fit), and

financial services. Under the present CEO, Alan Mulally, Ford is moving in the opposite direction:

divesting car rental, car repair, and financial services, and seeking buyers for several of its luxury

brands (including Aston Martin and possibly Jaguar), and aggressively cutting costs and capacity.

Given the characteristics of the industry and the company, examine the relative merits of each strategy

and explain which strategy you would favor.

A case can be made for each strategy.

The case for the Nasser strategy is that the luxury segment is more differentiated than the mass market

segments and offer greater profit potential. Similarly with forward integration, while the hardware side

of the business becomes ever more cut-throat (especially as a result of excess capacity), the services

side looks more attractive. A key problem for the Nasser strategy is that investment in luxury cars, in

after-sales services and parts, and car rental have few obvious spillover benefits for the core Ford

business.

The case for the Mulally strategy is that Ford is bleeding cash, its sales are falling, and it has massive

excess capacity. The key to survival and prosperity is to fix the core business. This means eliminating

excess capacity, cutting costs, and creating more attractive products.

The key has got to be the resources and capabilities of Ford itself. Although the Nasser strategy has its

attractions, Ford is a company that has limited acquisition experience – it was founded as a

manufacturing company, where its focus was on producing at low cost for the mass market. Thus, the

key critique of the Nasser strategy is that it took Ford into areas where it had limited expertise and few

relevant resources and capabilities; it distracted Ford from its key strategic challenge of rebuilding its

core automobile design and manufacturing operations in order to counter the competitive threat from

Toyota, Hyundai, and a revitalizing GM.

3. In both Europe and North America, established airlines are desperately cutting costs in order to

compete with the increasing number of budget airlines. However, it is highly unlikely that these

airlines will ever match the cost efficiency of Southwest, Jetblue, or Ryanair. What opportunities are

there for established airlines to improve their competitive position through differentiation strategies?

Make specific proposals for how established airlines can differentiate their customer offerings more

effectively.

Over the past decade, the established airlines have attempted to differentiate their services in numerous

ways. However, while such differentiation has proved critical to competitive advantage in business

class, for economy fliers, differentiation initiatives have met limited market response. Attempts to

increase legroom, offer “economy-plus” sections, or superior in-flight entertainment have produced a

limited response from customers. The only differentiation strategy that has proved wildly successful is

frequent flier schemes.

A critical question for the established airlines is whether any differentiation characteristics are capable

of creating more value for customers than their costs to the airline. One possible approach is to

examine the airline passengers’ value chain of activities to identify opportunities for creating customer

value (see Chapter 9, pp. 255–8). Some of the more tangible value creating opportunities are likely to

be improvements in the form of time savings and increased convenience. For example:

• Route networks and schedules that facilitate through travel on a single airline (or with partner

airlines).

• Faster and more reliable reservations and check-in systems.

4. Department stores (e.g. Federated Department Stores and Mays in the US, Selfridges and House of

Fraser in the UK) face increasing competition from specialized chain retailers and discount stores.

What innovative strategies might department stores adopt to revitalize their competitiveness?

Department stores were the dominant form of general retailing during the first six decades of the

twentieth century. Since the 1980s, department stores have been increasingly displaced by specialist

chains and discount chains. Against Wal-Mart, Best Buy, Home Depot, Foot Locker, and Bed, Bath

and Beyond, department stores lack buying power, parking space, and the operational efficiencies

associated with streamlined supply chains and “big-box” store formats.

Can department stores survive, or are they doomed to oblivion?

The starting point is to identify “distinctive differences” between department stores and other retail

formats that can then identify the relative strengths of department stores in terms of resources and

capabilities. These include:

• Reputation: Saks Fifth Avenue, Barney’s, Harrods, and Selfridge’s all have strong brand

names of their own which are distinct from the products they sell.

• Service: Department stores – especially the more upscale ones – are differentiated by a much

higher level of customer service than that found in most mass-merchandising chain retailers.

• Location: Most department stores have downtown locations.

• Product range: The key distinguishing feature of department stores is that they offer a much

broader range of products than more specialized retail chains.

• Attractive retail ambiance: Many department stores are in historic buildings, typically with

much more attractive (even luxurious) décor than most retail chains.

How can these relative resource and capability strengths be most effectively exploited?

• Product focus: Department stores should focus on products either where price competition

from mass-merchandising retail chains is weak (e.g. musical instruments, designer clothing,

jewelry), or where opportunities exist for service differentiation (cosmetics, bridal wear,

customized furnishings).

• Customer focus: Department stores should focus on catering to those customer types that

prefer service and quality reassurance over low price.

• Emphasis on services: Department stores can place less emphasis on stand-alone producers

and more on bundling products with high-value services (e.g. providing facials and guidance

on make-up as well as cosmetic products; providing interior designers’ services as well as

home furnishings).

• Redefining relationships with suppliers: For branded-goods suppliers, department stores offer

attractive downtown retail environments for showcasing their new products. Hence,

department stores may be able to enter partnerships with their suppliers, which may involve

leasing concessionary space to the supplier, or providing other facilities and services for which

suppliers will be willing to pay.