Independent Study--Competitive Strategy Chap 12&13 competitive strategy in declining industries and competition in global industries

There have always been industries in decline. Structural determinants of competition in decline. Demand declines and the characteristics of the market segments have a major influence on competition in the decline phase. The degree of uncertainty about whether demand will continue to decline is one of the most potent factors affecting end-game competition. In today’s world of little or no economic growth and rapid technological change, more and more companies are being faced with the need to cope with an end game. Demand decline occurs for several reasons, including technological advances, changes in lifestyles or tastes, and substitute products. Examples include refrigerators replacing iceboxes, calculators taking the place of slide rules, and more recently, handheld electronic organizers replacing traditional paper organizers. Expectations concerning future demand affect the competitive environment that develops. How fast an industry declines depends on how quickly companies withdraw capacity.
To stay alive in a declining industry, companies must avoid battling for market share. They also have to control costs, keep customers coming back with flawless service and improved products, and maintain employee goodwill.
Alternative strategies in decline include: A firm might consider adopting a leadership strategy if it is produces its product cost-efficiently, is clearly identified as the industry leader, or sells a well-accepted, branded product.
Firms can achieve leadership positions by building market share through competitive pricing, or they can reduce competition by acquiring their rivals’ product lines.
A niche strategy is appropriate if groups of loyal customers can be served profitably. For example, Harley-Davidson survived by not trying to be everything to everybody and instead concentrating on a niche market. It left most of the motorcycle market to the Japanese and sold high-horsepower “hogs” to a small segment of motorcycle enthusiasts—and became quite profitable in the process. Harvest manage a controlled disinvestment, taking advantage of strengths. Divest quickly this strategy is to sell a business before the value of its assets shrinks too much. Companies that do not enjoy leadership positions, cannot serve differentiated groups of customers, or cannot achieve the lowest break-even points in their industries should consider this alternative.
Look at the issue of how you can decide whether you exit a declining industry early or stay around to make profit.
To analyze competition in a global industry, it is necessary to examine industry economics and competitors in the various geographic or national markets jointly rather than individually. The environmental changes and strategic innovations of firms can trigger global competition. Firms can participate in international activities through licensing, export and foreign direct investment. The sources of global competitive advantage include: comparative advantage which is the firm has advantage to world position.