Timing strategy (country-specific)

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When country-specific timing strategies in are business administration strategies referred dealing with when a company enters a country in the market. A distinction must be made between the three basic strategies pioneer , early follower and later follower , whereby the latter has to be differentiated into the two sub- strategies of imitation strategy and niche strategy .

Pioneering strategy

The pioneer strategy ("first to market") is the strategy for the company that enters the country market first. It assumes that the company is able to develop a new (marketable) product or a new (marketable) technology and bring it to the market. In the case of technologies that are already available on other national markets, the pioneering company can also purchase this know-how abroad or conclude international collaborations such as license or franchising agreements.

As a pioneer, the respective company has (for a certain period of time) a quasi-monopoly position in the market. During this monopoly time, the pioneer had the opportunity to set technical standards and shape dominant designs. Even in his time as a monopoly, he should create the largest possible market entry barriers in order to keep competitors away for as long as possible. As a result, the pioneer can initially allow the innovators to amortize their market development and, if necessary, R&D costs with skimming prices.

advantage

  • Monopoly for a while.
→ Opportunity to set technological standards.
→ Opportunity to shape dominant designs.
  • Potential advantages due to a head start on the experience curve .
  • Development of market know-how → possibly image advantages.
  • Establishing customer contacts (should be used in a targeted manner).
→ Contracts with organizational customers (e.g. trade, sales, general important customers)
  • Establishment of barriers to market entry.

disadvantage

  • Uncertainty about further market development (expansion or contraction or collapse of the market).
  • There is a risk of technological leaps that substitute one's own technology before it has really established itself on the market or has paid for itself (see MD vs. MP3 USB sticks).
  • High market development costs.
→ Notice through advertising.
→ Development of sales channels.
  • Possibly. Resistance in the market that has to be overcome.

Earlier-follower strategy

Early followers ("early to market") enter the market relatively early after the pioneer. The time of market entry is around the late introductory phase of the product life cycle .

advantage

  • Lower market risk than with the pioneer.
→ Better assessment of the further market development.
    • Establishing barriers to entry.
    → Development of a product image.
  • Can still help determine relevant standards (advantage over late followers).
  • Can still gain market shares well in the fast-growing market (advantage over late successors).
→ Market leadership is still open (advantage over late successor).
→ You can still generate profits on the market for a long time (advantage over late successors).

disadvantage

  • Possibly. market entry barriers already exist.
  • Must be based on the pioneer.
  • Needs a competitive advantage over the pioneer to give him to be able to survive, while the pioneer succeeds because of the novelty of the product.

Later-follower strategy

Late followers are companies that come onto the market when relevant standards have already been set. Ideally, this happens in the maturity phase or even in the saturation phase of the product life cycle .

This strategy only works in two variants or sub-strategies.

Imitation strategy

In the case of the imitation strategy ("me too strategy"), the product of the most successful provider (s) is imitated (optically or technically or from the benefit provided , etc.). This strategy can only be successful if the imitated product is offered at a lower price than the "original" or the original product. Cost advantages are therefore required in production, which are ideally pursued using a price-volume strategy .

advantage

  • Low costs because of no or hardly any R&D costs
  • Based on established standards; no risk of choosing the wrong one (which does not prevail) (cf. for example Blu-ray Disc vs. HD-DVD ).
  • Can buy know-how (inexpensive) if necessary.
  • Can use standardization potential.
  • Can benefit from the industry experience curves (longitudinal and cross-sectional).
  • Very little uncertainty about further market developments.

disadvantage

  • Meets strong established competition.
  • Risk of price wars with the established providers.
  • Possible image disadvantage as "copycat".
  • If there is no market success, you have high sunk costs (investments in production facilities).
  • Mostly little in-house technical know-how.
  • Difficult to respond to changes.

Niche strategy

The late follower searches specifically for previously uncovered (or only very rarely or “insufficiently” covered) sub-markets. These are then (at least initially) relatively small markets in which special solutions are then offered.

advantage

  • Even in relatively highly competitive markets, there are relatively good market opportunities.
  • May be relatively low R&D costs.
  • (Again) a quasi-monopoly in the market (segment). → Relatively high flexibility in pricing.

disadvantage

  • Possibly. high market entry barriers (in the market itself) of the established providers.
  • Possibly high persuasion or market effort in order to communicate the special own additional benefit.
  • Possibly broken down into many small (possibly unprofitable) individual solutions.
  • If necessary, lures the large providers into the market niche that has been discovered.

Under certain circumstances, a supposed market niche can grow rapidly. In connection with technological leaps, the former niche provider can become a pioneer in this new market.

literature