Initial Position

Initial Strategy

Five Forces Analysis Low Price Commodity M arket

Barriers to Entry

Evolution of Strategy

Evolution of Strategy

Game TheoryStrategy Performance

S onite:• Protect our cash cow, protect our market share• Regain market share and profit once the other teams are focused on Vodite

• Our cash cow product generated enough revenue to fund the costly R& D for Vodite• Our market share in Pros soared, while E and U’ s market shares in Pros plummeted

Vodite:• Gain first-mover advantage

• Come out with a product with one solid attribute

• Prepare for possible price war•Focus on one product only

• We were among third wave of new Vodite products, but we gained significant market shares after 2 rounds• Our high efficacy attracts both Innovators and Early Adopters, and gained shares from early movers• Our low base cost gave us high profit margins• We could outspend other teams on advertising and sales force, and gain significant market shares

Game Theory

Strategy on the Edge• Edge of Chaos: Product is loosely aligned to all segments

to test the market.• A dapt : Change the genetic make-up of the product one

gene at a time to better cater to a segment.• Low-cost R& D : Improve base cost and attractive

characteristics.• Edge of Time: B ase R& D projects off one another to build

on past strengths.• Constant improvement: M ove from one short term win to

another.

Strategy on the EdgeName Autonomy Design

PV OOM 30 3

PV OM3 50 6

Name Power Base Cost

PS OLD 220

PS OL3 182

PS ONY 97

PS NY 2 75

PS OLD 75

PS OL2 90

5th to 6th turn:Revenue increase by 170%

5th to 6th turn:Contribution after marketing increased by 40%

5th to 6th turn:Contribution after marketing increase by 43%

4th to 5th turn:Revenue increased by 38%

Strategy as Simple RulesEisenhardt/ Sull Our MarkStrat TeamWorks best in rapidly changing environment

Rapidly changing consumer preferencesRapid changes in number of brands

Unpredictable competition No historical knowledge of competitors

Performance goal is growth Our goal was to grow our stock price via growing market share

The S ix Commandment sI. Thou shall not forsake thy homiesII. Thou shalt not covet price and product attributes (consumer

perceptions)III. Thou shalt have no other segment before the fastest growingIV. Remember research and development, to keep it holyV. Honour thy advertising and thy salesVI. Thou shall withdraw thy dogs

Lessons Learned

Recommendations1. Focus on growth in market share and profitability will

follow2. It’s better to have one or two star products than to have a

range of mediocre products3. M arket share can be sticky after achieving a threshold. 4. Don’t be afraid to withdraw low performing brands5. A dvertising and sales force spending is more important

than brand characteristics6. Use market studies as a guide, not a crystal ball that

predicts the future perfectly