Share Growth Strategy IV
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Identify the following challengers' share-growth strategies exhibited in the scenario and provide a rationale for the response (Encirclement example).
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Solution Summary
The solution identifies the challengers of share-growth strategies.
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THE SHARE GROWTH STRATEGY EXHIBITED IN THE SCENARIO
encirclement strategy A business strategy in which a company takes a proactive stance and challenges the market challenger on several fronts at the same time.
· Encirclement Strategy - This is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Each product will liberate some market share from the target competitor's product, leaving it weakened, demoralized, and in a state of siege. If it is done stealth fully, a full scale confrontation can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker expands the market niches that surround and encroach on the target competitor's market. This encroachment liberates market share from the target. The Japanese car exporters to the US did this. The envelopment strategy is suitable when:
o the market is loosely segmented
o some segments are relatively free of well endowed competitors
o the attacker has strong product development resources
o the attacker has enough resources to operate in multiple segments simultaneously
o the attacker has a decentralized organizational structure
Strategy one: going head-to-head with the competitor, matching each other in every way. To be successful, the attacker must have superior resources and be willing to continue longer than the company attacked.
Strategy two: attacking a part of the market where the competitor is weak. To be successful, the attacker must be patient and willing to ...
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