Bus Policy and Strategy
Recognize strategies to avoid and understand why they are dangerous
Some strategies that could be considered corporate, business, or functional are very dangerous and managers who lack creativity may be trapped into considering one of the these following strategies. * Follow the leader- This is where copying a leading competitors strategy may seem to be a good idea since they are doing so well but it ignores the competitors strengths and weaknesses and the possibility that they might be wrong. Example of this is Fujitsu Ltd., a computer company, who had been driven to catch up to IBM. Like IBM Fujitsu primarily a mainframe computer maker but so driven to catch IBM, they failed to realize that the mainframe business had come to a peak and was no longer growing by 1990. * Hit another Home Run- If a company is successful because it pioneered a very successful product, that company tends to keep searching for another super product that will establish growth and prosperity. In the long run the probability of finding another super product is very unlikely. Example of this Polaroid spent a lot of money trying to develop an instant movie camera, but the public ignored this because of the camcorder. * Arms Race- Joining in a battle with another firm for increased market share may increase sales revenues but will probably be offset by the money spending on advertisement, promotions, Research and development, and manufacturing costs needed to compete with the other firm. Example is in airlines, where price wars and rate specials have contributed to low profit margins and bankruptcies of major airlines like Easter, Pan America, and United. * Do Everything- When a company is faced with many interesting opportunities, management may leap on all of them. First a corporation may have enough resources to develop each of the ideas in to a project, but time, money and energy are exhausted as the projects demand large infusion of resources. An
Some strategies that could be considered corporate, business, or functional are very dangerous and managers who lack creativity may be trapped into considering one of the these following strategies. * Follow the leader- This is where copying a leading competitors strategy may seem to be a good idea since they are doing so well but it ignores the competitors strengths and weaknesses and the possibility that they might be wrong. Example of this is Fujitsu Ltd., a computer company, who had been driven to catch up to IBM. Like IBM Fujitsu primarily a mainframe computer maker but so driven to catch IBM, they failed to realize that the mainframe business had come to a peak and was no longer growing by 1990. * Hit another Home Run- If a company is successful because it pioneered a very successful product, that company tends to keep searching for another super product that will establish growth and prosperity. In the long run the probability of finding another super product is very unlikely. Example of this Polaroid spent a lot of money trying to develop an instant movie camera, but the public ignored this because of the camcorder. * Arms Race- Joining in a battle with another firm for increased market share may increase sales revenues but will probably be offset by the money spending on advertisement, promotions, Research and development, and manufacturing costs needed to compete with the other firm. Example is in airlines, where price wars and rate specials have contributed to low profit margins and bankruptcies of major airlines like Easter, Pan America, and United. * Do Everything- When a company is faced with many interesting opportunities, management may leap on all of them. First a corporation may have enough resources to develop each of the ideas in to a project, but time, money and energy are exhausted as the projects demand large infusion of resources. An