Competitive Advantage in Mature Industries Essay

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12 Competitive Advantage in Mature Industries We are a trite "penny profit" business. That means that it takes bard work and attention to detail to be financially successful - it isfarfrom being a sure thing. Our store managers must do two things well; control costs and increase sales. Cost control cannot be done by compromising product quality, customer service, or restaurant cleanliness, but rather by consistent monitoring of the "vital signs" of the business through observation, reports, and analysis. Portion control is a critical part of our business. For example, each Filet-O-Fish sandwich receives 1fluid ounce of tartar sauce and 0.5 ounces of cheese. Our raw materials arc fabricated to exacting tolerances, and our managers check them on an ongoing basis. Our written specification for lettuce is over two typewritten pages long. Our French fries must meet standards for potato type, solid and moisture content, and distribution of strand lengths. —Edward H. Rcusi, Presidentand Chief Operating Officer, McDonald's U.S.A.1 Outline • Introduction and Objectives • Competitive Advantage in Mature Industries Cost Advantage Segment and Customer Selection The Quest for Differentiation Innovation 364 Introduction and objectives Strategy Implementation in Mature Industries: 365 Structure, Systems, and Style Efficiency through Bureaucracy Beyond Bureaucracy Strategies for Declining Industries Adjusting Capacity to Declining Demand The Nature of Demand Strategies for Declining Industries Summary Notes Introduction and Objectives Although technology-based industries grab the attention of both business journalists andstrategy researchers, if importance is measured byshare of GDP rather than share ofpress coverage, mature industries - food, energy, construction, vehicles, financial services, and

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