Strategic Management for a Medium Sized Firm Research Paper

Strategic Management for a Medium Sized Firm - Research Paper Example This can be seen by the fact that customers are getting more educated. The access to the internet also balances the information asymmetry in the market making customers knowledgeable of the price and features of competing products. Customers look for products the way they want it. With this development, essential issues should be addressed by the company as firms are producing more than they can sell which significantly drives down prices. This situation poses more intense rivalry from competitors requiring companies to develop an efficient and sustainable strategy. For a medium-sized firm operating in a hypercompetitive industry which embarked on a follower strategy should seek to have a more effective marketing strategy. Follower strategies or "me too" strategies are only able to compete on price. Thus, followers are deemed to reduce prices forever, squeezing their margins and profitability. Possible strategic alternatives which it can bank on are differentiation and innovation strategies. Differentiation strategy in a hypercompetitive market is imperative and "not discretionary." As customers have higher bargaining leverage, a firm should introduce product features which adds value to its buyers. Instead of simply following the strategies and move of the market leader, a medium size firm should embark on developing innovative products. This is very important taking note of the fact that the market is unstable. Oftentimes, the case is that buyers are dissatisfied with the present alternatives and are looking for new options. Competition through differentiation and innovation are two strategic options which are always more effective than price competition. Â