Dynamic Environment: Dynamic environment is characterized by newly formed or re-formed
industries that has been created by technological innovations, emergence of new consumer needs/segments or other socio-economic changes that elevate a new product or a service to the level of potentially viable business opportunity.
Excess Capacity: A strategy that firms use to discourage entry of potential rivals by maintaining excess capacity that is, producing products much more in excess of the demand.
Market Development: Market development strategy involves finding new market segments for a company’s products.
Market Penetration: When a company expands market share in its existing product markets, it is said to follow market penetration strategy.
Product Life Cycle: An industry passes through a number of phases starting with introduction
followed by growth, maturity and decline phases. This concept is called product life cycle.
Product Proliferation: Most companies produce a range of products instead just one product. This is done to target different segments with different products. This strategy of plugging market niches is called product proliferation.
Price Cutting: In some situations, price cutting can be used as a strategy to deter entry of other companies, thereby protecting the profit margins of the incumbents in the industry.
Stable Environment: As the industry traverses the dynamic phase, the intense competition during this stage leads to a shake-out phase. As a result, the industry enters a stable phase characterized by a small number of large companies.
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