Strategic Pitfalls in Maturing Industries


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1.   Perhaps the biggest mistake a company can make as an industry matures is steering a middle course between low cost, differentiation, and focusing – blending efforts to achieve low cost with efforts to incorporate differentiating features and efforts to focus on a limited target market.

CORE CONCEPT: One of the greatest strategic mistakes a firm can make in a maturing industry is pursuing a compromise strategy that leaves it stuck in the middle.

2.   Other strategic pitfalls include:

a.   Being slow to mount a defense against stiffening competitive pressures

b.   Concentrating more on protecting short-term profitability than on building or maintaining long-term competitive position

c.   Waiting too long to respond to price cutting by rivals

d.   Overexpanding in the face of slowing growth

e.   Overspending on advertising and sales promotion efforts in a losing effort to combat growth slowdown

f.    Failing to pursue cost reduction soon enough or aggressively enough

 


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