Chapter 7 Imitation with a Twist: Strategies. Small Business Management 4660. 1. Prestrategy. What do you expect out of the business? What is your product or service idea? How innovative or imitative will you be? What do you plan to sell-everyone or targeted markets?
Small Business Management
Select an industry - offers:
b. Innovative strategyis pursued by doing something very different than what’s been done before.
two key areas - following an incremental
Most companies operate somewhere on the continuum of purely innovative to “cloned,” imitative businesses and varying on degrees of similarity.
An opportunity that makes it possible for a new business to gain a foothold in a market
iii. Entry Wedges:
E.g. Cosmetic products – halalantoyyiba - affordable
E.g. Part-time / home-based distributors
Occurs when a customer is willing to sign a contract with a manufacturer
E.g. Outsource production
Cost benefits refers to the ways by which a company can keep costs low for the customers:
Once customer are more aware - two possibilities in the growth stage:
Boom or Shake-out - industry will reach a fairly stable number of companies with minor variations and a slow drop in numbers.
Differentiation strategies – aimed at mass markets – situations in which nearly everyone might buy
Focus strategies – target a portion of the market – niche market – specialised market
Specialised and localised
(e.g. HalalanToyyiba and local active ingredients)
Custom features – high quality
(e.g. Custom-made skin care vs mass produced skin care)
Intensive personalized support after-sales service (e.g. online chat)
Ignored by large competitors
High quality products with high prices
(e.g. Polished packaging)
Demonstrating exceptional expertise
(e.g. normal skin care ingredients vs highly concentrated skin care ingredients)
Offering one-stop shopping with complete inventory, immediate delivery, knowledgeable staff (e.g. integrated social media)
Use a prepackaged business (e.gonline affiliates ready system to distribute)
Keep prices super low (below RM 10 skin care)
Eliminating retailers’ mark-ups
(e.g. Sell direct via internet – no distributors)
Strengths - internal characteristics of business - give it an advantage over others
Opportunities - chances to make greater sales or profits in the environment.
Once the SWOT analysis is completed the best strategic direction can be determined: flaunt, fix, fight, flee, find, or fire-up.