Elements of Strategies for Declining Industries:
Leadership
- Selective investment / Turnaround; Invest as appropriate to give real competitive advantage.
Idea: Become one of the strongest in declining industry – low-cost or clear differentiation
Segment or Niche
- Selective investment / Turnaround; Identify attractive segment with great potential for long-term survival or short-term return
Exploit or Harvest
- Phased Withdrawal / Retrenchment; Controlled divestment, reduce product alternatives and advertising to cut cost
Problem: Loosing buyer and supplier confidence – leads to divestment or liquidation
Quick divestment
- immediate sale or liquidation
Principle:
Matrix mapping favorable/unfavorable Industry structure and good/poor Competitive position and potential, resulting in recommended strategic direction
Issues:
Sectors or segments static or expanding, Knowledgeable customers, Price pressure, Increasing commoditization, Concentrated distribution
+ Exit cost and competitors leaving industry
Applications:
To select strategy when early warning signs are clear
Source of Strategies for Declining Industries:
End-Game Strategies for Declining Industries (Harrigan and Porter, 1983)