Добавил:
ivanov666
Опубликованный материал нарушает ваши авторские права? Сообщите нам.
Вуз:
Предмет:
Файл:Competition theory. Учебное пособие.pdf
and more unpredictable (if to compare with traditional ideas
about it). However, each change implies not only danger, but
also new additional opportunities to achieve future business
success.
Therefore, a modern strategy of the organization has to
be capable to transform the changes in the external environ-
ment of the organization into its strategic and tactical competi-
tive advantages. This logically results in the fifth characteristic
of an effective strategy — flexible adequacy.
All specified characteristics are not alternative to each
other: they complement and intensify one another.
Literature
1. Azoev, G. L. Konkurentsiya: analiz, strategiya i prakti-
ka. — M. : Tsentr ekonomiki, 1996. — 350 p.
2. Azoev, G. L., Chelenkov, A. P. Konkurentnyie pre-
imuschestva firmyi. — M. : Mezhdunar. otnosh., 2005. — 157 p.
3. Vasilev, S. V. Menedzhment II. — V. Novgorod :
NovGU im. Yaroslava Mudrogo, 2003. — 123 p.
4. Gorbashko, E. A. Konkurentosposobnost promyishlen-
noy produk-tsii. — SPb : SPbUEF, 1991. — 64 p.
5. Ivanov, I. D. Sovremennyie monopolii i konkurentsi-
ya. — M. : Myisl, 2000. — 457 p.
6. Magomedov, Sh. Sh. Konkurentosposobnost tova-
rov. — M. : Dashkov i K, 2003. — 294 p.
7. Yudanov, A. Yu. Konkurentsiya: teoriya i praktika. —
M. : AKALIS, 2006. — 272 p.
Questions for self-check
1. What is the strategy of the organization?
2. In what way does the operational management differ
from the strategic one?
81
3. Give a definition to the competition and describe the
five competitive forces according to Porter.
4. Describe basic competitive strategies (by Porter).
5. What is the value creation chain (value chain) accord-
ing to Porter?
6. Describe the main characteristics of an effective strategy.
7. Speak about the concept of strategic management ac-
cording to I. Ansoff.
8. Describe three stages of the development of strategic
management.
82
CHAPTER 4.
demand
0
price/quality
A
B
COMPETITIVE STRATEGIES
IN THE FIELD OF A LARGE-SCALE
PRODUCTION1
4.1. THE BASIS FOR AND EFFICIENT FRONTIERS
OF A LARGE-SCALE PRODUCTION
Despite their disadvantages, large enterprises are the basis for any modern developed economy. No more than 1–2 %
of the total number of firms of the USA, Western European
countries or Japan create up to 50 % of the GDP made in these
centers of the world economy and produce more than a half of
the overall industrial output.
Figure 4.1. Demand distribution depending
on the price and goods qualities
1
Yudanov A. Yu. Konkurentsiya: teoriya i praktika. M. : AKALIS, 2006.
83
Thus, alongside their weaknesses, large enterprises have
a number of advantages. The quantitative aspects of the de-
mand can be represented in the graph.
The demand centers around some average quality level
(typical of the time being), and, consequently, around the price
of a product (near the O point in the graph). Both expensive
goods of extra-top quality and cheap low-quality goods are on
sale in significantly smaller numbers. By producing goods with
characteristics close to those most popular (in the graph, it’s
the segment from A to B), it is possible to satisfy much of the
effective demand with a relatively small range of goods, which
objectively gives an opportunity to supply a high-volume output of standard goods.
Introduction of major companies to the industry and their
transition to an oligopolistic state is usually accompanied by a
high increase in the production volume. One of the main reasons for that is the economy of scale.
A decrease in average costs caused by an increase in the
volume of production is ensured by a variety of reasons.
Technology reasons. More productive equipment is usually more expensive, so it’s rational to use expensive equip-
ment only when producing a considerable volume of goods or
services.
Advantages of the specialization. A large amount of goods
or services produced allows to increase the degree of both the
equipment specialization and specialization of the personnel.
Benefits of a simultaneous production of several goods.
Often, it is possible to produce new goods on the basis of byproducts, wastes or temporarily free equipment of a large-scale
production.
If the scale of production exceeds a certain (optimal) volume supplied, the economy of scale is replaced by a disecono-
my. Excessive specialization and benefits as a result of simultaneous production of several goods cause the situation when
84
the production turns out to fail to quickly react to the changes
in the market. Thus, the diseconomy of scales is already possi-
ble even if the enterprise’s size is not really big.
Most fixed costs are invariable only in the short-term pe-
riod. In the long run, when production capacities do not
change, the fixed costs grow. Therefore, it is necessary to call
them relatively fixed costs. Relatively fixed costs do not grow
even in the long-term period. It is these costs that are considered to be the main benefits of a large producer.
Examples of relatively fixed costs are as follows:
• costs for research and development;
• promotional costs;
• costs for a sales network.
4.2. THE STRATEGY OF SATISFYING MASS DEMAND,
INCENTIVES FOR CONSUMPTION
The main advantage of standard goods consists in an opportunity to organize their effective production, though their
consumption value’s not really high. Nevertheless, a crucial
necessity for a producer of standard goods is to attract mass
consumers, as the underutilization of the unrealized industrial
capacity is a true challenge for a big enterprise. Huge production and sales capacities together with heavy expenses on sci-
ence and engineering are its major power factors. However,
this very same factor can ruin the firm in case of considerable
decrease in production volume.
The solution to the problem of the capacity utilization
consists in "bribing" the consumer, making him or her forget
about possible shortcomings of standard goods.
Consumption incentives include:
• low prices — relying on low costs, a large enterprise
can establish attractive prices;
85
• improvement of quality and service — the expenses
that a large enterprise suffers to make the product cheaper,
could be spent to improve the quality or the service at the same
price;
• a wide range of goods — violent enterprises have to
offer a full assortment range of the most popular kinds of
goods.
However, it is necessary to remember that the quality,
service, and a wide range require additional costs. Aiming to
improve them, violent enterprises should not go beyond all lim-
its: i.e. the price for the offered goods should not turn too high
for an average consumer.
Thus, a violent firm always aims at gaining surplus profit
and successfully achieves this goal. However, this goal is
achieved not through putting pressure on the market, but rather
through completely satisfying an average consumer’s needs.
4.3. EVOLUTION OF A VIOLENT FIRM
A violent firm’s introduction is possible only on the basis
of intensive investments.
A. Chandler showed that to achieve success in the market, a large corporation has to make interconnected investments
in three directions:
• creation of a large-scale production;
• creation of sales and marketing networks on a national
(later — international) scale;
• creation of an effective management system.
The importance of creating a marketing-and-sales network is predetermined, first of all, by the problem of the capacity utilization, i.e. by one of the central problems of the violent
strategy.
Investment in establishing an effective management system is of no less importance. A large company constantly faces
86
the problem of the loss of control, that’s why it greatly needs to
introduce an effectively operating hierarchy of managers and
has to make heavy investments in this sphere, which will facili-
tate tangible and intangible incentives for the managers, their
preparation, information sharing inside the firm, etc.
The company that manages to be the first in its industry to
solve all the three investment problems, enjoys (in the long run)
the "first-mover advantage" in its struggle against its competitors.
The intensive investment into the three major spheres,
which are actually the forces that transform the company into a
violent one, is followed by the period of rapid growth. It is at
this stage when violent firms acquire features of the type of
major companies that are called "proud lions". This type of
firms is usually represented by poorly diversified companies
with a well-defined output structure. Nevertheless, "lions" are
rated as technological leaders with regard to the production of
mass products.
It is at the stage (the stage of "a proud lion") when violent
firms create powerful research centres that do not disappear
later, no matter what changes the corporation would experi-
ence. Large expenses on the Research and Development are an
invariable attribute of all violent firms of any type.
The active evolution of a major company, though, usually culminates not in the position of "a proud lion", but rather in
the state of "a mighty elephant". Companies of this type lose
the former dynamism, and start enjoying a period of extra stability, instead. That’s why the company can stay at the stage of
"a mighty elephant" for many decades. The stability is mainly
provided with three factors: big sizes, an availability and diversification of a wide international network of branches.
Under the conditions of stiff competi tion, it is difficult to
continuously be the first in producing new goods. Violent firms
often use the tactics "the second but crafty": i.e. the firm is not
necessarily supposed to be the first to receive the greatest benefit
87
from the innovation. The firm should establish special structures
watching other companies’ achievements, being quick in supplying analogs that preferably should surpass their counterparts. The
main goal of following the leader is a decrease in risk and costs
for the Research and Development through imitating the proven
samples rather than through looking for innovations.
The last stage of the evolution of a violent firm has to do
with the condition of "a slow hippopotamus". Preserving a big
account turnover, the corporation gradually loses its capability
to gain an adequate profit and starts suffering losses. Reasons
for this scenario are as follows:
• the firm’s strategic mistakes suggesting the company’s
getting distracted in a wide range of directions (excessive di-
versification);
• the overall recession of the production resulting in the
necrosis of much of the funds of the industries that are no longer promising.
Disinvestment can serve as a solution to the problem.
Disinvestment implies getting rid of surplus production and
looking for factors that can reduce the costs.
4.4. THE STRATEGIC CENTRE OF A FIRM.
HINTERKHUBER'S MATRIX
"COMPETITIVENESS / VALUE OF PRODUCTION"
Obtaining advantages over competitors in the main busi-
ness sphere (the so-called strategic centre) of the firm is of paramount importance for companies of all types.
The strategic centre includes:
• output that is characterized by the greatest part of the
firm’s turnover;
• output to which the firm commits its future;
• output creating a certain image of the firm (those
products that have played a special role in the history of the
88
firm, that are associated with the company by most clients, and
Comparative competitiveness
low
average
high
3 Competence
6 Competence
,
Disinvestment,
that are a source of pride of the company’s personnel, etc.).
Firms can have a strong strategic centre only if the latter
coincides with the competence centre (the number of abilities,
the body of knowledge, technologies, etc., that provide compet-
itive advantages of this firm in comparison with others).
To assess the quality of the strategic centre of the com-
pany and to elaborate recommendations on its enhancement,
one can use the matrix of X. Hinterkhuber "competitive-
ness/value of production" (scheme 4.1).
In an ideal situation, 100 % of the company’s overall
production of goods and/or services have to center around cells
3 and 6 of the matrix. In other words, all productions that are
greatly or at least relatively important to the firm, have to be
highly competitive in comparison with other companies (they
have to make the competence centre of the firm).
1 Financial
participation,
high
capture
2 Strategic union
centre
4 Strategic union 5 Strategic union
centre
average
Value of production
7 Disinvestment
low
outsourcing
Scheme 4.1. X. Hinterkhuber’ matrix
"competitiveness / value of production"
8
outsourcing
9 Search for
new markets
89
Nevertheless, it is difficult to be ahead of competitors in
everything. It is natural that there can be only one recommen-
dation concerning the industries that meet this requirement, —
they should be supported and maintained. They should be allo-
cated with all the necessary resources even at the expense of
the company’s other branches.
If the degree of competitiveness is high, and the value of
production is low for the firm’s activity (matrix cell 9), it
means that firms don’t fully take an advantage of technological
benefits made by this firm. It is necessary for the firm to reach
new groups of consumers, to look for new sales markets where
their potential will flourish. When the business gains some success in it, the branch involved in a certain production will be
included into the competence centre of the firm.
Matrix cells 7 and 8 are occupied by unimportant indus-
tries characterized by low competitiveness. Chances for disin-
vestment are to be considered (closing or sale of certain
branches). If products of liquidated industries are necessary for
the firm, they can be taken from other companies.
Matrix cell 1 signifies an important branch of the firm
that greatly lags behind its competitors. If this industry is really
an important element incorporated into the strategic plan of the
company, it is possible to improve the situation only with the
help of emergency measures, for example through overtaking
(buying) a highly-competitive company and incorporating it
into this branch.
Matrix cells 2, 4 and 5 show some lag of the firm behind
its competitors in some fields that are quite important for it.
What is needed here is strategic partnership with more ad-
90