[Abstract] This paper will be a strategic choice questions based on target concentration promote the use of its analysis and conclusions: The target concentration strategy both for the experience, size, or for large enterprises are less broad applicability.
[Key words] target concentration strategy for competitiveness, competitive advantage
a business success in the market competition that started in the right strategic choice. According to “South Orange North trifoliate orange\A successful enterprise must not only be a simple imitation and bigger.
one of the “big enterprise development” challenge
1. overall cost leadership strategy analysis of the application of the premise. Overall cost leadership strategy requires that enterprises have reached a certain scale of assets, under the premise of guaranteeing quality, the total cost down to below the industry average cost so that cost is lower than most competitors in the same industry.
When a company to achieve overall cost leadership, that meant that it received the competitiveness of the overall cost leadership, and this competitive ability in the shortest possible time, into a competitive advantage for businesses, will have to consider the possibility of meeting the following premise:
(1) achieve economies of scale operating. In size under the conditions of operation can bring about lower costs. Because in some capacity within the fixed costs are certain, in this context more products, then the share of each product, the lower the unit fixed costs. However, if the product can not be achieved sales, while strategic options fail.
(2) adoption of new technologies, new equipment, new technology and new management methods and strive to improve labor productivity, and reduce costs. Efficiency can lead to a decline in unit costs. However, the same need to achieve the sales as a precondition. Otherwise, not only will not bring lower costs, but makes the increase in costs.
2. subscript diferentiation strategy for the application of the premise. Standard diferentiation strategy refers to the enterprises to provide products or services that the pursuit of differentiation, there are characteristics. Such as: In the product design, technical features, the packaging and decoration, customer service and other aspects such as different, unique.
enterprises which are the difference of the competitiveness of the process and the competitiveness of the differentiation into a competitive advantage,lotro gold, we must consider the following premise:
(1) to the whole industry as a target in the whole intra-industry achieved characteristics. That is, to address a variety of customers in this industry, different needs, and vigorously develop the market of new products, or in ensuring the basic functions of product, while additional features to meet customer requirements.
(2) differences in the light of the realization of their own natural resources. Point out here that differentiation strategy does not mean that companies can ignore the cost and its own R & D and management capabilities, to find the industrial features must be in their own natural resources to achieve this base up.
3. on the total cost of the lead, marked diferentiation comprehensive evaluation strategy. Clearly, the overall cost leadership and standard diferentiation strategy is broken down in a number of industries within the broad framework for advantage. They have a common constraint premise: companies must have a certain scale. Only companies reach a certain size can only be implemented under the premise of the overall cost leadership strategy or a standard diferentiation. And here the scale of what we had said, do not mean sales. It should also include technical, personnel quality, capital, operational capabilities, profitability and other factors.
2, “SWATCH” implementation of the strategy objectives of clustering strategy is the main attack
target concentration of a particular customer base, is in the market within a particular small space or a product line made by a sub-section strategic choice is targeted at market segments to choose a low-cost or differentiated products and services as a competitive edge to achieve competitive advantage.
when the Swiss watch industry in the market, the Japanese quartz watch, when a comprehensive defeat, a new watch called the Swatch was born. Swatch’s global sales to date as much as 200 million more than a roll of wealth for the shareholders.
painstaking attention to detail, it is easy to see the goal SWATCH gathering strategy:
1. targeting the low-end segments in the watch industry market. The Swiss watch industry is less than 100 Swiss francs for the Swiss watch no one product. To find a way to 30 U.S. dollars in Switzerland sold watches.
2. watch differentiation. Watch simply changed the timing function and the development of garment accessories as new features, so that timing tool towards fashion.
3. the characteristics of the brand. What is the SWATCH it? Swiss watch and the second watch, and then is a Swatch.
4. the quality of differentiation. The low-end market is often linked with poor quality. Swatch watches, however, maintain the highest possible quality. It is less than 1% return rate. The world’s best watch repair rate is less than 3%.
5. cost leadership. They watch parts from 155 down to 51. Reduced the rotating part also reduces the chance of damage, and the assembly of watches the company is also required much less manpower, and these wages are high, Switzerland. As a result, labor costs from 30% to 10%.
in the end choose to growing up under the strong body, or choose not to strong growth, through this, the conclusion is not self-evident.
3, target concentration strategy, the specific implementation
Akio Morita founded the circle theory suggests that: numerous large circle and small circle between the voids must exist, that there has not been occupied as part of the market. Some of these gaps is the goal of gathering strategy can be implemented areas.
1. individual strategies should be adapted to environmental conditions. Enterprises to develop competitive strategies on environmental base point. The environment are often in flux, companies in developing competitive strategy must fully take into account changes in the environment can survive and development.
2. competitors grasp of the situation. Competitors should be ignored or inability to provide services to buyers of office as the entry point for community needs. Typically, a field of competitors to meet the demand for the means and methods adopted by the highest consumer satisfaction with the difference between the consumer needs are not well satisfied, which is can be replaced by opportunities.
3. competitive positioning. Can not be blindly pursued the goal is too large. According to an objective situation of the enterprise’s own resources to determine their own advantage, competitive position.
4. objectives of gathering strategic choice. If a certain market segments in the existing and effective product quality, brand recognition, and service were lower than the level of the enterprise can offer, then the choice of different concentration of strategy for the leading target. If the market segments that can be effective with sufficient volume of business operation chose to gather cost leadership strategy.
4, conclusions
1. target concentration strategy is to not have enough resources and adequate competitive enterprise of choice. To China’s enterprises, for example, on the one hand because of the vast majority of Chinese enterprises do not yet have enough resources and enough competitive and partly because multinational companies within the industry have time to take into account the preferences of some small and diverse consumer groups, therefore, select the target Comparison of clustering strategies for access to a huge success.
must attack first, is the new market entrants or small and medium enterprises based on the Road. Each new market entrants and the disadvantaged groups can make use of target concentration strategy to create their own competitive advantage, but eventually also be able to occupy a strong market position.
2. target concentration strategy is to expand the strength of large enterprises to implement the necessary strategies. For the strength of large enterprises, the choice of entering new trades and industries are not familiar with the time, the same should be done to find targets such as small-business concentration, introduction of a target concentration strategy. Concentration of multiple targets through multiple strategic portfolio to achieve expansion, to obtain more profits. This competitive advantage will be obtained much higher than the blind pursuit of the total within the industry-wide cost leadership strategy and the standard diferentiation strategy.
shows various stages of their business, both with its broad applicability.