Key Strategy Tools: The 80+ Tools for Every Manager to Build a Winning Strategy by Vaughan Evans

Author:Vaughan Evans [Evans, Vaughan]
Language: eng
Format: azw3
ISBN: 9780273779124
Publisher: Pearson Education Limited
Published: 2013-03-26T04:00:00+00:00

These are some of the profit growth options, both short and long term, for bridging the capability gap in segments you will invest in. They are summarised in Figure 47.1.

Next, you consider the profit growth options for those segments which you have chosen for holding – probably not to invest in, but definitely not to withdraw from.

Figure 47.1 Strategic repositioning and profit growth options

Segments for holding

Holding on in a segment does not mean doing nothing, taking no strategic action. You need to actively manage your segment position and preferably strengthen it.

In the long term there are three profit growth options you should consider:

Reduce variable cost– if you stand still on cost, you run the risk of a competitor under-cutting you over time; an ongoing programme of cost reduction would be wise, whether in purchasing or operational efficiency.

Recompete – change the rules of the game in some way, so that you effectively create a new segment out of the old; easier said than done, but it can be done – think of a specialist retailer like Pets at Home, which has stolen share from traditional pet shops, supermarkets and DIY chains through offering not just a vast range of pet supplies but a destination in itself, with its rabbit, guinea pig and tropical fish displays captivating customers young and old; or in manufacturing, look for inspiration to the iPhone, so much more than a mobile phone.

Alliance – you have a favourable competitive position in a segment which is moderately attractive; perhaps by allying with a competitor you could jointly have a stronger position in that segment and enable superior profit growth prospects for both parties – see Tool 60 on creating value from mergers, acquisitions and alliances.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.