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Below is a positioning map for the Business Telephone Industry. Discussing the relative positions of AT&T and its major competitors on the two key attributes. Do you think AT&T is well positioned with respect to its competitors? Which competitor(s) should AT&T be most concerned about? Why? What additional information might you want to have about the competitors and/or about the marketplace at this point? How might a seemingly "weaker" competitor (i.e., out positioned by AT&T on both key attributes) like ROLM make a dent in AT&T's market share given that by the time they enter, AT&T will have been on the market for a least several months?
The current position of AT&T is apparently very prospective in terms of taking the lead in the market and outpacing its major rivals. As the matter of fact, AT&T is currently taking leading position in terms of ease of use and productivity. These factors are extremely important for the overall competitive position in the market. At the same time, it is worth mentioning the fact that AT&T holds the second place in terms of productivity after Execuetone and the company holds the first position in terms of ease of use. At this point, the company is particularly successful that opens larger opportunities for the fast market expansion and taking the leading position in the market because the company can provide its customers with services which are easy to use that is particularly important today, when new technologies make the use of new products and services very complicated. In such a situation, many customers prefer products and services which are easy to use instead of sophisticated by complicated to use products and services.
In such a situation, AT&T should be particularly concerned with the position of its major rival Execuetone because this company has a higher productivity, whereas the change in technology or the introduction of an innovation can boost the ease of use of Execuetone services. As a result, Execuetone can outpace AT&T fast. Moreover, the higher productivity allows Execuetone to grow faster compared to AT&T. The latter will be unable to outpace its rival if the productivity gap grows wider. Potentially, the higher productivity can open prospects for increasing the market share of the company. Therefore, AT&T should focus on increasing its productivity. At the same time, it is important to know the current market share of either competitor to assess adequately the extent to which the threat to the position of AT&T is real. In addition, it is important to trace the dynamic of the growth of all competitors to reveal whether either competitor is growing consistently faster than others or not.
In such a situation, weaker competitors such as Rolm or Tie need to improve their performance through the rise of ease of use and productivity respectively. What is meant here is the fact that Rolm has a relatively high productivity but the company needs to introduce services which are easy to use to catch up with AT&T. In case of Tie, the company needs to increase its productivity to catch up with AT&T. In both cases companies can improve consistently their performance in the matter of months on the condition that they apply effective marketing strategy and can boost their productivity and easiness of use along with the quality of their services.
What forces explain the timing of major technological transitions? Can you predict and plan for such transitions? If so how and when should you try?
The timing of major technological transitions occurs under the impact of several factors. In this respect, it is necessary to take into consideration such factor as technological progress. The development of technologies contributes to the introduction of new products and technologies which are more effective compared to previous ones that stimulates the technological transition. In addition, the development of socioeconomic relations and the introduction of new modes of production can stimulate the technological transition. For instance, the automation of the production process instead of manual labor was encouraged by the introduction of new technologies and the change of the mode of production, where the role of humans has been minimized. Furthermore, the product lifecycle can also affect the major technological transitions because as long as the demand for a product keeps growing, there is no need to introduce changes but, as soon as the slowdown in the consumption of the product appears, it is necessary to start introducing innovations to improve the quality of the product. In such a context, it is possible to foresee and plan the transition when the demand and consumption of a product or service are stable and do not grow anymore. Hence, before the consumption drops, it is necessary to introduce an innovation to prolong the lifecycle of the product.
What are portfolio models? Specify the different types. How do they help managers better understand their product offerings? What are the advantages and consequences of using these models? When should a manger use a portfolio model?
Portfolio models are models which imply the use of certain system of evaluation of a companyââ‚¬â„¢s marketing position and performance. Portfolio models can be grounded on the growth-share matrix which distinguishes four portfolio models based on types of companies operating in the market: question marks, stars, cash cows, and dogs. Portfolio models help managers to identify potential problems and strengths of companies as well as assess risks and benefits of investments in companies. Question marks are companies with the high market growth and relatively low market share. Their position is uncertain because in case of a slowdown of their growth they are likely to take the inferior position in the market to the extent that they can lose their market share being unable to resist to stronger rivals. As for stars, these companies are the most reliable because they have a high market growth rate and market share. On the other hand, the competition is steadily rising and, if these companies fail to introduce innovations and improve their marketing performance because of their leading position, they may fail and lose their competitive advantages. Cash flows are companies that have a considerable market share but their growth is slow. They accumulate substantial financial resources but they fail to use them effectively. These companies have a great potential but they are likely to have poor financial management that prevents them from fast growth.
Mintzberg and Waters discuss intended and emergent strategies. Compare and contrast these strategies and discuss the ramifications relative to the incremental and disruptive technologies in the Christensen articles and mentioned in the text.
Mintzberg and Waters distinguish intended and emergent strategies. Basically, these strategies are essential and, as a rule, companied develop and implement both intended and emergent strategies. However, these strategies have substantial differences because intended strategies are strategies that companies develop to meet their strategic goals and their vision of their development. In real life, these strategies often fail because they do not take into consideration objective factors which exist in the market which may not always be foreseen by strategy developers. In contrast, emergent strategies and strategies that emerge in response to the changing business environment. In such a situation companies develop their strategies on the ground of the actual situation in the market, available resources, competition and so on. In this respect incremental and disruptive technologies can play an important role in the implementation of the aforementioned strategies because incremental technologies can help to implement successfully the intended and emergent strategy, whereas disruptive technologies can lead to their failure.