Requirement 3 A) There are a number of offensive strategy options for improving
ID: 350680 • Letter: R
Question
Requirement 3
A) There are a number of offensive strategy options for improving market positions using cost-based and blue-ocean type strategies. Define the terms and suggest ways in which the strategies could be operationalized
B) Strategic offensives should, as a general rule, be grounded in a company's strategic assets and employ a company's strengths to attack rivals. Define and discuss the term strategic assets and its significance in gaining a competitive advantage
C) Explain what is a blue-ocean strategy and what is its appeal. Then, Discuss why timing of strategic moves is important.
Explanation / Answer
A) There are a number of offensive strategy options for improving market positions using cost-based and blue-ocean type strategies. Define the terms and suggest ways in which the strategies could be operationalized
Answer:- Cost-based: One method for estimating the selling price of a certain product by the organization in which the price of a product is calculated by adding the element of profit or percentage apart from the cost of producing the product. In order to come across to the final selling price of the product, this method utilizes the manufacturing cost as the basis. In case of a cost based pricing, profit is added in the form of either a fixed amount or a percentage of the total product manufacturing cost in order to determine the final selling price of the product.
Blue-Ocean: This can be seen as a specialized offensive method in which the industry is still taking its final shape, there are no competitors and there exists a huge opportunity for wide-open long-term growth and profit for the organization which can develop the demand for new products. This method offers revenues and profit growths through finding out or investing in new industry segments which can develop a new demand altogether,
How it can be operationalized (Blue-ocean)
- It can create and capture new demand
- Make competition irrelevant
- Create uncontested market space
- Align the whole system of a company's activities in pursuit of differentiation and low cost
Blue-ocean example:
- Circ De Soli took the advantage of utilizing humans and getting consent from them to create a circus rather than using animals, and it has become very successful
B) Strategic offensives should, as a general rule, be grounded in a company's strategic assets and employ a company's strengths to attack rivals. Define and discuss the term strategic assets and its significance in gaining a competitive advantage
Strategic assets can be defined as those assets which are required by nay organization in order to maintain its ability to accomplish the future outcomes and in the absence of these assets the future wellbeing of the organization can be in greater danger.
Patents, trademarks, copyrights, domain names, and long-term contracts would be examples of strategic assets that provide sustainable competitive advantages. Companies with excellent research and development might have valuable strategic assets
Certain competitive advantages are based not on the distinctive capabilities of firms but on their dominance or market position. These are the ‘Strategic Assets’ of the company and can broadly be separated into three main types. Natural Monopolies occur in markets that cannot accommodate more than one firm, Sunk Costs can prevent entry by resulting in a different cost structure between the incumbent and potential entrants, while Market Restrictions such as licenses and regulation can further deter entry. These are different from distinctive capabilities in that they could be acquired by any company facing similar circumstances.
Explain what is a blue-ocean strategy and what is its appeal. Then, Discuss why the timing of strategic moves is important
A Blue Ocean strategy is based on discovering or inventing new industry segments that create altogether new demand, thereby positioning the rm in an uncontested marketplace which offers superior opportunities for greater growth and profitability
Blue ocean strategy is mainly focused to gain a dramatic and durable competitive advantage by abandoning efforts in order to beat the competitors in the existing market and rather focusing on finding out new industry or new market which render existing competitors mainly irrelevant and permits the organization to develop and capture a totally new demand,
Most Blue Ocean is created from within, not beyond, red oceans of existing industries, Incumbents can also create new market spaces making the right strategic moves. Because of first-mover advantages and disadvantages, competitive advantage can be gained from the time when a move is made and the manner in which it is made.
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