EVOLUTION, DIFFERENTIATION AND

GLOBALISATION
TOPICS
1. Movie theater Value

TEAM NO. 6
Minna Pauly
(2013154)
Mohit Chaudhary
(2013156)

Chain

Navya Mukhi
(2013162)

2. Walmart

Neeraj Garg
(2013166)

3. Economies of scale

Nihal Moidu
(2013170)

4. First and second mover

Pareena Neema
(2013191)

strategy

5. GAP Inc.

Parthajit Sar
(2013194)
Piyush Mittal
(2013197)

Creating a Value Chain

 Drivers of Uniqueness Differentiation Variables

Selection of Key Variables
Identifying Linkages & Cost Reduction Opportunities

 Walmart- the biggest player owing to its competitive

strategies and ruthless attitude.
Main elements to its strategy formulation:
a) Dominate the retail market
b) Growing by expansion
c) Name recognition and customer satisfaction

d) Entering into new sectors

 Walmart- cost leader because of their lowest

price policy.

Major issue Walmart faces:

1. Competiton of Walmart with local stores
Action that can be taken by Walmart:
1. Walmart can come with smaller store sizes to
compete with the local stores.

2. Walmart can enter new sectors which would

be promising an overall growth physically
and territorially.

What is the major driving force behind

the success of these mammoths??????

Answer.. Economies
SOURCES
of Scale!!
Technology
Indivisibility

Specialization

THE DEVELOPMENT OF
TECHNOLOGY: FROM KNOWLEDGE
GENERATION TO DIFFUSION
IMITATION
Supply side

Basic
Knowledge

Invention

Innovation

Diffusion

Demand Side
ADOPTION

LEGAL PROTECTION OF
INNOVATION
Patents
Copyright

Trademarks

-- exclusive rights to a new product,

process, substance or design.
-- exclusive rights to artistic, dramatic,
and musical works.

-- exclusive rights to words, symbols or

other marks to distinguish goods and
services; registered with Patent
Office.

Trade Secrets --protection of chemical formulae,

recipes, and industrial processes.
Contracts

--contracts between firms and between

a firm and its employees can restrict
transfer of technology and know how.

COMPLEMENTARY
RESOURCES
Competitive
manufacturing

Distribution

Finance
Core
technological
know-how in
innovation

Service

Complementary
technologies

Marketing

Other

Other

Bargaining power of owners of complementary resources depends

upon whether complementary resources are generic or specialized.

CHARACTERISTICS OF A
TECHNOLOGY WHICH
INFLUENCE IMITABILITY

Ability to imitate an innovation depends on :

How codifiable is the knowledge? Explicit knowledge is

easier to understand than tacit knowledge.
How complex is the technology?

LEAD TIME

If rivals can imitate-- time lag (lead time) is the major

advantage of the innovator.
But maintaining lead-time advantage requires
continuous innovation

VALUE OF FIRST- AND SECOND-MOVER

STRATEGIES
Not always desirable to be first-mover.
Does not guarantee competitive advantage.

Advantages of first-movers
Most important: positive reputational effect with customers.
Can be recognized as particularly innovative firms which can positively influence
customers perceptions of products/services.
Have first opportunity to move along learning curve.

VALUE OF FIRST- AND SECOND-MOVER

STRATEGIES (CONT.)
Disadvantages of first-movers
Will sometimes offer products/services that are poorly designed or defective.
Might also launch new products with inadequate marketing or promotional efforts.
Sometimes customer demand is so strong that first-movers are unprepared to handle it.

VALUE OF FIRST- AND SECOND-MOVER

STRATEGIES (CONT.)
Second-movers have opportunities due to mistakes of first-movers.
- They can piggyback on the efforts of first-movers, while avoiding much of the initial costs/
R&D, marketing and advertising, and costs associated with opening distribution channels.

VALUE OF FIRST- AND SECOND-MOVER

STRATEGIES (CONT.)
Factors which characterize the dynamic industry contexts in which these decisions must be made:
Ambiguity of emerging markets
Uncertainty of customer demand
Lack of industry infrastructure typical of established industries.
Lack of industry standards.

Product life cycles can be very short

PCs: 4-6 months
CT scanners: less than 2 years

STRATEGY IMPLEMENTATION:
INVENTION TO INNOVATION

While invention depends upon creativity, successful innovation

requires integrating new knowledge with multiple business
functions.

Need to link R&D departments with other functions (the problem

of Xeroxs PARC)
The role of cross-functional new product development teams as
vehicles for integration
The role of product champions--in achieving integration and
counteracting organizational inertia.

GAP INC.
Differentiation
Distinguishes your brand from others for competitive advantage
Difficult to maintain uniform strategy globally
Could limit market segments

 Low prices
Good design

Functionality
Acceptable quality
In-store playrooms for children
Wheelchairs for customer use
Extended hours
Customer involvement

HONDA

AMAZON

STARBUCKS

Exclusively private vehicles

Premium quality

Low cost
Large market share

Preparing orders to meet customers wishes

Quality products
Variety

 High fashion casual clothing

Enduring value
Quality products

Moderately priced
Segmentation Old Navy/ Banana Republic
Individualized stores

Q6. CONSIDER THE CHANGES THAT HAVE OCCURRED IN A

COMPARATIVELY NEW INDUSTRY ......................... HOW IS
THE INDUSTRY LIKELY TO EVOLVE IN THE FUTURE?
Industry Life cycle is the different stages an industry will go through, from
the first product entry to its eventual decline. There are typically five stages
in the industry lifecycle. They are defined as:
Early Stages Phase

Innovation Phase

Cost or Shakeout Phase

Maturity

Decline

BOTTLED WATER INDUSTRY

It is the second largest soft drink category - after CSDs. In the UK alone, annual estimated consumption level
is between 1bn and 2bn litres.
The bottled water industry evolution has been according to the industry life cycle model. When the industry
entered the market it had to break the trend of tap water
The bottled water industry evolution has been according to the industry life cycle model. When the industry
entered the market it had to break the trend of tap water
Major threats to the future progress of the bottled water market are water coolers and public water supplies as
these coolers generally offer a significant price advantage over bottled water.

But the sheer size of the water cooler container (often around 19 litres), residential storage and delivery times
can be a problem which gives an upper hand to bottled water.
According to the sales and trend forecast, in future bottled water industry is likely to evolve with a better
footfall and increasing growth percentages.