COMPETITIVE ADVANTAGE IN MATURE INDUSTRIES

COMPETITIVE ADVANTAGE IN MATURED INDUSTRIESAnalysis of industry life cycle suggest that maturity has two principal implications for competitive advantage:a. Firstly, it tends to reduce the number of opportunities for establishing competitiveb. secondly, it shifts these opportunities from differentiation-based factors to cost-based factors. The overall three competitive business strategies that can be used over competitors are:

1. COST ADVANTAGE
Cost is the overwhelmingly important key success factor in most mature industries, to attain low cost in this stage, there are 3 driving forces that can enhance that;
i. Economies of scale; buying in bulk for cheaper prices.
ii. low cost inputs; cheaper raw materials.
iii.low overheads; lower expenses.

2. SEGMENT AND CUSTOMER SELECTION
The sluggish demand growth, lack of product differentiation, and international competition tend to depress the profitability of mature industries. And for these reasons, countries/industries need to segment their target market or reduce a niche strategy to grow and be efficient. As a result, segment selection can be a key determinant of differences in the performance of companies within the same industry.
An example is Wal-Mart, their profitability was boosted by locating their stores in small and medium-sized towns where it faced little competitors.
                             

3. THE QUEST FOR DIFFERENTIATION
Differentiating to attain some insulation from the rigors of price competition is particularly attractive in mature industries. the problem is that the trend toward commoditization narrows the scope for differentiation and reduces a customer willingness to pa a premium for differentiation.

your competitors do not stand a chance. Choose wisely!!!!!!!