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    Chapter 16 - Strategic Choices For Mature and Declining Markets

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    Marielle Salan
    Strategic choices for companies in mature and declining markets include: 1) In mature markets, companies can differentiate their products through quality, service, branding or maintaining a low-cost position to sustain competitive advantage. 2) As markets decline, companies must determine if the market remains attractive based on demand factors, competitive intensity, and exit barriers. 3) For declining markets, common strategies include harvesting cash quickly, maintaining the successful mature market strategy, targeting niche segments, or planning an early exit to reduce barriers.

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    Chapter 16 - Strategic Choices For Mature and Declining Markets

    Uploaded by

    Marielle Salan
    666 views2 pages
    Strategic choices for companies in mature and declining markets include: 1) In mature markets, companies can differentiate their products through quality, service, branding or maintaining a low-cost position to sustain competitive advantage. 2) As markets decline, companies must determine if the market remains attractive based on demand factors, competitive intensity, and exit barriers. 3) For declining markets, common strategies include harvesting cash quickly, maintaining the successful mature market strategy, targeting niche segments, or planning an early exit to reduce barriers.

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    Strategic Choices for Mature and Declining Markets

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    Chapter 16 - Strategic Choices for Mature and Declining Markets

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    Strategic choices for companies in mature and declining markets include: 1) In mature markets, companies can differentiate their products through quality, service, branding or maintaining a low-cost position to sustain competitive advantage. 2) As markets decline, companies must determine if the market remains attractive based on demand factors, competitive intensity, and exit barriers. 3) For declining markets, common strategies include harvesting cash quickly, maintaining the successful mature market strategy, targeting niche segments, or planning an early exit to reduce barriers.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    666 views2 pages

    Chapter 16 - Strategic Choices For Mature and Declining Markets

    Uploaded by

    Marielle Salan
    Strategic choices for companies in mature and declining markets include: 1) In mature markets, companies can differentiate their products through quality, service, branding or maintaining a low-cost position to sustain competitive advantage. 2) As markets decline, companies must determine if the market remains attractive based on demand factors, competitive intensity, and exit barriers. 3) For declining markets, common strategies include harvesting cash quickly, maintaining the successful mature market strategy, targeting niche segments, or planning an early exit to reduce barriers.

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    of 2

    Strategic Choices for Mature and Declining Markets

    I. Strategic Choices in Mature Markets


    A. Strategies for maintaining competitive advantage
    Both analyzer and defender strategies may be appropriate for units with a leading, or at least a
    profitable, share of one or more major segments in a mature industry.
    Analyzer: Appropriate for developed industries that are still experiencing some technological change
    and may have opportunities for continued growth.
    Defender: Works where the basic technology is not very complex or is unlikely to change dramatically.
    Both analyzers and defenders can attempt to sustain a competitive advantage in established productmarkets:
    Through differentiation of their product offering
    Methods of Differentiation:
    Dimensions of product quality:
    Dimensions of service quality:
    o Performance
    o Tangibles
    o Durability
    o Reliability
    o Conformance with specifications
    o Responsiveness
    o Features
    o Assurance
    o Reliability
    o Empathy
    o Serviceability

    o Fit and finish

    o Brand name

    o Make
    By maintaining a low-cost position

    Methods of Maintaining a Low-Cost Position:


    o A no-frills product
    o Innovative product design
    o Cheaper raw materials
    o Innovative production processes
    o Low-cost distribution
    o Reductions in overhead
    Customers satisfaction and loyalty are crucial for maximizing their lifetime value
    II. Marketing Strategies for Mature Markets
    A. Strategies for maintaining current market
    B. Strategies for extending volume growth
    share
    Increased penetration strategy
    Share Leaders:
    - Expanding distribution or developing more
    Fortress defense
    convenient and accessible channels
    Extended use strategy
    -improve customer satisfaction and loyalty
    & encourage and simplify repurchasing
    - Increasing the amount of product used by
    Flanker brands
    the average customer by increasing
    frequency of use or developing new and
    -different name, same product
    more varied ways to use the product.
    Small-share companies:
    Market expansion strategy
    Niche strategy
    - Firms may identify and develop entirely
    -limited and clearly defined range of
    new customer or application segments
    products is sold to a specific group of
    customers
    III.
    Strategies for Declining Markets
    Relative attractiveness of declining markets

    Factors that help determine the strategic attractiveness of declining product markets:
    Conditions of demand
    Factors affecting the intensity of future
    Technological advances produce
    competitive rivalry
    substitutes often with higher quality or
    Size and bargaining power of the customers
    lower cost.
    who continue to buy the product,
    Demographic shifts.
    Customers ability to switch to substitute
    Change in needs, tastes, or lifestyles.
    products or to alternative suppliers, and
    Cost of inputs or complementary
    Any potential diseconomies of scale
    products.
    involved in capturing an increased share of
    Exit barriers
    the remaining volume.
    The higher the exit barriers, the less
    hospitable a product-market will be.
    Divestment or liquidation
    The firm that divests early runs the risk that its forecast of the industrys future may be wrong.

    By planning early for departure, the firm may be able to reduce some of those barriers before the
    liquidation is necessary.
    Marketing strategies for remaining competitors
    Harvesting Strategy

    -The objective is to generate cash quickly


    Profitable Survivor Strategy
    by maximizing cash flow over a
    - Investing enough to increase share
    relatively short term.
    position and establishing itself as the

    industry leader for the remainder of


    Maintenance Strategy
    the markets decline.
    Niche Strategy
    - The business continues to pursue the
    same strategy that brought it success
    - May be viable if one or more substantial
    during the markets mature stage.
    segments will either remain as stable
    pockets of demand or decay slowly.

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