Running head: Assignment 5
Business Strategy and Management Principles
Harrisburg University of Science and Technology
Prof: Rick Coplen, MPA, BS
Yaswanth Kumar Pedavalli
Describe standardization, format wars, and how standardization can lead to a format war.
Formulation, publication, and implementation of tips, rules, and specifications for common and
recurrent use, aimed toward achieving optimum degree of order or uniformity in a very given
context, discipline, or field. It is a system of assertions to which all pertinent gatherings in an
industry or association must stick to guarantee that all procedures connected with the production
of a decent or execution of an administration are performed inside set rules. This is done to
guarantee the deciding item has predictable quality, and that any conclusions made are tantamount
with all other identical things in the same class.
Battles to line and management technical standards in a very market are cited as format wars.
essentially, battles to regulate the supply of differentiation, and therefore the worth that such
differentiation will produce for the client. as a result of differentiated merchandise typically
command premium costs and are typically overpriced to develop, the competitive stakes are huge.
The gainfulness and survival of an organization may rely on upon the result of the fight.
A format war happens once 2 incompatible versions of the same technology begin to vie
against each other within the market. In nearly each case, one in every of the 2 formats wins come
in the top, either attributable to a far better selling strategy or a superior product, going away teams
of unlucky customers with associate degree obsolete technology. Format wars are commonest
within the realm of audio and video technology, however they’ve conjointly concerned computers,
digital media storage, and even one thing as basic as electricity.
Once standardization occurs, how does the industry benefit?
Benefits of Standardization in the Industry:
A specialized standard sureties’ similarity amongst items and their supplements.
Having a standard can diminish perplexity in the psyches of purchasers.
The rise of a standard can diminish production costs. Once a standard rises, items that
depend on the standard configuration can be mass delivered, empowering the producers to
acknowledge generous economies of scale while bringing down their cost structures.
The rise of standards can decrease the dangers connected with supplying correlative items,
and in this manner build the supply for those supplements.
Standards lead to both minimal effort and separation points of interest for individual
organizations and can raise the level of industry benefit.
During a format war, describe how competition occurs and how a price war can take shape.
Competition exists wherever organizations turn out similar product that charm to an equivalent
cluster of customers, once totally different corporations create or sell things that though not in head
to go competition still contend for an equivalent cash within the customer’s pocket.
Price wars will produce economically devastating and psychologically debilitating things
that take an unprecedented toll on a personal, on an individual, an organization, and industry
gainfulness. Regardless of who wins, the competitors all appear to wind up more terrible off than
before they joined the fight. But, price wars are turning out to be progressively regular and
extraordinarily savage. Consider the accompanying examples:
A common plan of action to jump-start demand is to adopt a razor and blade strategy:
valuation the merchandise low so as to stimulate demand and increase the put in base, so making
an attempt to form high profits on the sale of enhances, that area unit priced comparatively high.
This strategy owes its name to inventor, the corporate that pioneered this strategy to sell its razors
and razor blades. This identical strategy is employed within the videogame industry: makers value
videogame consoles at value to induce shoppers to adopt their technology, whereas they create
profits on the royalties received from the sales of games that run on the sport system.
Define first and second movers. How do these two entities interact within and industry, and
who learns what as the industry takes shape?
An organization that pioneers a selected product class or feature by being first to supply it to plug.
The first mover that makes a revolutionary product is in a very imposing business model position.
First mover’s area unit firms that have the assets, capabilities, and core competencies that modify
them to realize a competitive advantage through innovative and entrepreneurial competitive
actions. If the new product satisfies unmet shopper desires and demand is high, the primary mover
will capture important revenues and profits.
Benefits of First Mover:
• Establish significant brand loyalty
• Enduring competitive advantage
• Create switching costs
Second movers are organizations that react to a first mover's focused activity, frequently through
impersonation or a move intended to counter the impacts of the activity.
The first mover could also be able to accumulate valuable information associated with client
desires, distribution channels, product technology, method technology, and so on. information thus
accumulated will provides it a pro that later entrants would possibly notice troublesome or bigticket to match.
a second mover ought to judge initial customers' reactions to the first-movers actions and analyze
markets to spot essential problems. second mover to catch a percentage of the underlying clients
and increase a level of brand and client devotion and keep away from a portion of the dangers
confronted by the first mover. It will likewise help to gain from the first mover's oversights and
victories and maintain a strategic distance from business sector improvement costs.
Michael N. Young; Donald Liu. Hong Kong Disneyland. Harvard Business Review. 2014.
Michael E. Porter. Competitive Strategy. Free Press. 2004.
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