Strategy options for a Fragmented Industry

Question

What are the strategy options for a Fragmented Industry?

Answer 1

Strategy Options for a Fragmented Industry

1. Suitable competitive strategy choices in a fragmented industry contain:

i. Operating and constructing “formula” facilities – This strategic approach is often employed in retailing businesses and restaurant operating at multiple locations.

ii. Becoming a low-cost operator – When price competition is strong and profit margins are under constant pressure, companies can pressure no-frills operations featuring low overhead, low-cost labor / high productivity.

iii. Specializing by product type – When a fragmented industry’s products include a variety of services or styles, a strategy to concentrate on one service or product category can be effective.

iv. Specialization by consumer type – A firm can wager out a market place in a fragmented industry by catering to those consumers who are interested in low costs, customized features, carefree service, unique product attributes, or other mores.

v. Focusing on a limited geographic region – Even though a firm in a fragmented industry can’t win a big share of total industry-wide sales. It can still try to dominate a regional or local geographic region.

2. In fragmented industries, firms normally have the strategic freedom to follow narrow or broad market targets and low-cost or differentiation-based competitive benefits. Several different strategic approaches can exist side-by-side.