Strategic Choices for Mature and Declining Markets

I. Strategic Choices in Mature Markets

A. Strategies for maintaining competitive advantage
Both analyzer and defender strategies may be appropriate for units with a leading, or at least a
profitable, share of one or more major segments in a mature industry.
Analyzer: Appropriate for developed industries that are still experiencing some technological change
and may have opportunities for continued growth.
Defender: Works where the basic technology is not very complex or is unlikely to change dramatically.
Both analyzers and defenders can attempt to sustain a competitive advantage in established productmarkets:
Through differentiation of their product offering
Methods of Differentiation:
Dimensions of product quality:
Dimensions of service quality:
o Performance
o Tangibles
o Durability
o Reliability
o Conformance with specifications
o Responsiveness
o Features
o Assurance
o Reliability
o Empathy
o Serviceability

o Fit and finish

o Brand name

o Make
By maintaining a low-cost position

Methods of Maintaining a Low-Cost Position:

o A no-frills product
o Innovative product design
o Cheaper raw materials
o Innovative production processes
o Low-cost distribution
o Reductions in overhead
Customers satisfaction and loyalty are crucial for maximizing their lifetime value
II. Marketing Strategies for Mature Markets
A. Strategies for maintaining current market
B. Strategies for extending volume growth
share
Increased penetration strategy
Share Leaders:
- Expanding distribution or developing more
Fortress defense
convenient and accessible channels
Extended use strategy
-improve customer satisfaction and loyalty
& encourage and simplify repurchasing
- Increasing the amount of product used by
Flanker brands
the average customer by increasing
frequency of use or developing new and
-different name, same product
more varied ways to use the product.
Small-share companies:
Market expansion strategy
Niche strategy
- Firms may identify and develop entirely
-limited and clearly defined range of
new customer or application segments
products is sold to a specific group of
customers
III.
Strategies for Declining Markets
Relative attractiveness of declining markets

Factors that help determine the strategic attractiveness of declining product markets:
Conditions of demand
Factors affecting the intensity of future
Technological advances produce
competitive rivalry
substitutes often with higher quality or
Size and bargaining power of the customers
lower cost.
who continue to buy the product,
Demographic shifts.
Customers ability to switch to substitute
Change in needs, tastes, or lifestyles.
products or to alternative suppliers, and
Cost of inputs or complementary
Any potential diseconomies of scale
products.
involved in capturing an increased share of
Exit barriers
the remaining volume.
The higher the exit barriers, the less
hospitable a product-market will be.
Divestment or liquidation
The firm that divests early runs the risk that its forecast of the industrys future may be wrong.

By planning early for departure, the firm may be able to reduce some of those barriers before the
liquidation is necessary.
Marketing strategies for remaining competitors
Harvesting Strategy

-The objective is to generate cash quickly

Profitable Survivor Strategy
by maximizing cash flow over a
- Investing enough to increase share
relatively short term.
position and establishing itself as the

industry leader for the remainder of

Maintenance Strategy
the markets decline.
Niche Strategy
- The business continues to pursue the
same strategy that brought it success
- May be viable if one or more substantial
during the markets mature stage.
segments will either remain as stable
pockets of demand or decay slowly.