Opportunities/threats for firm with aa product business model
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1. What are the opportunities and threats of a firm which employs a single or dominant product business model?
2. Compare and contrast cost leadership, differentiation, rapid response, and focus opportunities. When would each approach work best? Worst?
3. What are the opportunites and threats of a single product/dominant product firm in emerging industries, transition industries, mature, declining, and fragmented industries?
4. Cite examples of single/dominant product firms, their competitive strategy, and why that strategy fits or does not fit their industry life cycle.
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Solution Summary
The opportunities and threats for a firm with aa product business model are examined.
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Strategic Management
Single or dominant product business models are those that have concentrated their efforts in offering only one product variety to the market. Some of the opportunities that a firm employing this model would experience are increased knowledge of the product being offered within the company that can present an opportunity for the company to perfect the production of the product and do it so well that they will experience long lasting competitive advantage and success. This information base can also be a drive for "innovation and passionate focus on the product" (Johnson, 2005). This not only betters the company's products but sets the company apart forms others.
Some of the threats facing single or dominant product companies are: overdependence on a single product which is viewed to riskier that if the product portfolio was diversified. In the event that the product does not do very well, then the company would be making big losses with nowhere else to supplement company cash inflow. Another threat to such kind of firms is market saturation. Should a market become saturated with the products or alternative technologies, then the company would lose a big market share, profits, sales volumes and revenues. Another threat is the rapid change in technology in the way that things are done. A new technology may make a company's product obsolete. For example Smart phones have began making Tom Tom's tracking products ...
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