Strategies for dynamic and stable markets
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This document discusses strategies for dynamic and stable markets using open innovation. For dynamic markets, the document recommends using simulation strategies to anticipate competitive dynamics and develop successful strategies. Simulation techniques like simulated test marketing (STM) involve modeling distribution, advertising, promotions, competitor reactions, and other factors. For stable markets, the document recommends a concentration strategy by focusing on stable inputs and market segments left by general operators.
Strategies for dynamic and stable markets
- 1. P R E S N T E D B Y K A M A L . V . I V T H S E M R A M S STRATEGIES FOR DYNAMIC AND STABLE MARKETS
- 2. Introduction Open innovation strategies plays a significant role in market structures- Dynamic and Stable. Open innovation is more conductive to dynamic markets rather than stable environments Different environmental settings require the integration of different types of external sources. In the case of technological changes taking place in a rapid pace, the companies need to integrate suppliers in to the innovation process. Companies are forced to look out for new technological solutions. There are only a limited number of companies who have the funds and resources to make that in-house with speed and depth of knowledge . Stable environments give rise to a competitive atmosphere.
- 3. Dynamic Markets and the simulation strategy Corporate managers are using simulation to understand and anticipate the dynamics of competitive strategies. These simulations range from multimillion dollar formal computer models to brief, informal war games in which team of managers and consultants play their roles as competitors and customers. Using simulations marketing managers develop successful strategies, anticipating events and later occurred in the real market and taking pre-emptive or pro-active reactions. The first model of Simulated Test Marketing (STM) was developed in the US in the 1970 s. This was developed in response to the increasing rates of failure of actual test marketing. Different STM Models developed by different agencies in different countries have methodological and analytical differences, but the basic process is same
- 4. STM PROCESS Stage 1 – Distribution – The number of percentage of retailers the company would cover and the level of penetration Stage 2 – Advertisement spend Stage 3 – Promotions planned such as discounts, free samples Stage 4 – Probable reactions from the competitors. Stage 5 – Special category like seasonablity
- 5. Concentration strategy for Stable markets Market condition in which the demand for the product is stable and the industry is resistant to a major technological change Favourable situation for concentration strategy Favourable condition for concentration growth exists when a company has stable sourcing of inputs in terms of price, quantity and timely availability. If market prevails are effective operators and thrive on general market segments leaving particular pockets or segments for specialists.