Central Markets

Central means that you may face powerful forces that threaten your market position. These forces are as diverse as watching competitors eat away at your position through aggressive pricing, or by offering dazzling feature-laden products, or by technology-rich firms generating new applications overlaid with value-added services.

To counter such threats, look for joint ventures so that the cumulative effects yield greater market advantages and offer more strategy options than you can achieve independently. A “mere demonstration” in the form of a merger and acquisition (M&A) or other type of joint venture has proven the strategy of choice for some companies.

Challenging Markets

If you enter a market dominated by a strong and aggressive competitor, be watchful. You could place your company at excessively high risk.

If, however, your long-term objectives strongly support maintaining a presence in a challenging market, and if the expenditures of financial, material, and human resources are consistent with your overall strategy, then find a secure position, again, at the decisive point. It could be one of your single best chances for lessening the risk and achieving a solid measure of success.

Dell Computer is a prime example of employing excellent supply-chain management. From its beginnings, the company’s strategy relied on activating its manufacturing process and supply-chain only when an order was received from a customer. That strategy worked at eliminating the cost of storing excessive inventory.

Dell benefited by shipping just the right amount of components to its factories, thereby avoiding investing in expensive warehousing. For instance, in one facility, what used to be done in more than two buildings now is accomplished in one by applying the techniques of supply-chain management.

A single center of gravity ... is the place where the decision should be reached; a victory at that point is in its fullest sense identical with the defense of the theater of operations.

Clausewitz

 
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