Discount Business Strategy: How the New Market Leaders are Redefining Business Strategy PDF
Preview Discount Business Strategy: How the New Market Leaders are Redefining Business Strategy
Discount Business Strategy How the New Market Leaders are Redefining Business Strategy Michael Moesgaard Andersen and Flemming Poulfelt Discount Business Strategy Discount Business Strategy How the New Market Leaders are Redefining Business Strategy Michael Moesgaard Andersen and Flemming Poulfelt Copyright©2006 JohnWiley&SonsLtd,TheAtrium,SouthernGate,Chichester, WestSussexPO198SQ,England Telephone (cid:2)+44(cid:3)1243779777 Email(forordersandcustomerserviceenquiries):[email protected] VisitourHomePageonwww.wiley.com AllRightsReserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem ortransmittedinanyformorbyanymeans,electronic,mechanical,photocopying,recording, scanningorotherwise,exceptunderthetermsoftheCopyright,DesignsandPatentsAct1988 orunderthetermsofalicenceissuedbytheCopyrightLicensingAgencyLtd,90Tottenham CourtRoad,LondonW1T4LP,UK,withoutthepermissioninwritingofthePublisher. RequeststothePublishershouldbeaddressedtothePermissionsDepartment,JohnWiley& SonsLtd,TheAtrium,SouthernGate,Chichester,WestSussexPO198SQ,England,oremailed [email protected],orfaxedto(+44)1243770620. Designationsusedbycompaniestodistinguishtheirproductsareoftenclaimedastrademarks. Allbrandnamesandproductnamesusedinthisbookaretradenames,servicemarks, trademarksorregisteredtrademarksoftheirrespectiveowners.ThePublisherisnotassociated withanyproductorvendormentionedinthisbook. Thispublicationisdesignedtoprovideaccurateandauthoritativeinformationinregardtothe subjectmattercovered.ItissoldontheunderstandingthatthePublisherisnotengagedin renderingprofessionalservices.Ifprofessionaladviceorotherexpertassistanceisrequired,the servicesofacompetentprofessionalshouldbesought. OtherWileyEditorialOffices JohnWiley&SonsInc.,111RiverStreet,Hoboken,NJ07030,USA Jossey-Bass,989MarketStreet,SanFrancisco,CA94103-1741,USA Wiley-VCHVerlagGmbH,Boschstr.12,D-69469Weinheim,Germany JohnWiley&SonsAustraliaLtd,42McDougallStreet,Milton,Queensland4064,Australia JohnWiley&Sons(Asia)PteLtd,2ClementiLoop#02-01,JinXingDistripark,Singapore129809 JohnWiley&SonsCanadaLtd,22WorcesterRoad,Etobicoke,Ontario,CanadaM9W1L1 Wileyalsopublishesitsbooksinavarietyofelectronicformats.Somecontentthatappearsin printmaynotbeavailableinelectronicbooks. LibraryofCongressCataloginginPublicationData Andersen,MichaelMoesgaard. Discountbusinessstrategy:howthenewmarketleadersareredefiningbusiness strategy/MichaelMoesgaardAndersen&FlemmingPoulfelt. p. cm. Includesbibliographicalreferencesandindex. ISBN-13:978-0-470-03353-1(cloth:alk.paper) ISBN-10:0-470-03353-3(cloth:alk.paper) 1. Organizationaleffectiveness. 2. Industrialefficiency. 3. Industrialmanagement— Casestudies. 4. Discounthouses(Retailtrade) I. Poulfelt,Flemming. II. Title. HD58.9.A5342006 658.4(cid:2)012—dc22 2006018007 BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary ISBN-13978-0-470-03353-1(HB) ISBN-100-470-03353-3(HB) Typesetin11/16ptTrumpMedievalbyIntegraSoftwareServicesPvt.Ltd,Pondicherry,India PrintedandboundinGreatBritainbyTJInternationalLtd,Padstow,Cornwall,UK Thisbookisprintedonacid-freepaperresponsiblymanufacturedfromsustainableforestry inwhichatleasttwotreesareplantedforeachoneusedforpaperproduction. Contents Foreword xi 1 Why are some companies more successful than others? 1 The real life laboratory 1 Creating value and simultaneous destruction 3 The volume game 6 Simplicity – the word of the day 10 Cut to the core 12 Service? Something we’d rather do ourselves 15 The black box of strategy turned upside down 17 2 The oxymoron of existing strategies: where do we go from here? 19 Conventional strategic thinking 19 The generic strategy framework 20 Porter challenged 23 Mixed strategies – the airline industry 26 3 When discount strategy becomes important 35 Hyper competitive markets and traditional strategy 35 The position of a discount strategy 38 A single form – a simple form? 41 vi / CONTENTS 4 CBB 43 Cultivating a hyper competitive market by way of aconsistentapproachtothenotionofdiscount strategy 43 A contradiction to the bursting of the IT-bubble 43 The mobile sector – hyper-competition 44 CBB as the enhanced service provider 46 The original mission and strategy 47 Crisis and the filing of a petition for bankruptcy 48 The discount strategy – not a single quick fix 50 New management 50 Reinvention of the IT-systems 51 A new customer care concept 52 New brand and branding 53 Reverse relationship marketing 54 Political mass marketing 55 Reorganization of the distribution 56 Cost cutting programs 57 Active price leadership 57 CBB’s discount product – cheaper and better 58 Product production characteristics 58 Product marketing characteristics 62 CBB’s use of price as a tactical weapon 64 Theimportanceofthepricevis-a`-visthecustomers 64 Active leadership in price wars 65 Results – best in class 68 A revolution in the mobile sector? 70 Perspectives 72 5 Lidl 75 Gaining ground in a hyper competitive market by a consistent discount strategy 75 CONTENTS / vii The German conquest 75 The grocery retail sector – hyper-competition 76 The original mission and strategy of Lidl 81 The discount strategy – all encompassing 82 Structuredtocontroltheimpactofexternalfactors 83 Leadership through continuity 84 The look and feel of Lidl 84 High service level with a discount concept 87 Squeezing the brands 89 Aggressive go to market strategy 91 Publicity through secrecy 94 Active price leadership 95 Lidl’s discount product – cheaper and better 96 Product marketing characteristics 99 The use of price as a tactical weapon 99 Active leadership in price wars 100 Results – top of the class 101 Perspectives 103 6 Ryanair 105 Reshaping a competitive market through a consistent discount strategy 105 Flying with the giants 105 Theairlineindustry–liberalizedtofullcompetition 106 The early days of deregulation 108 Towards the liberalized sky with a new strategy 109 A transformed and polarized industry 111 Ryanair as the alternative independent carrier 114 Financial collapse evaded at the 11th hour 115 The no frills, low fare strategy – not just one route 116 New management 116 Cost cutting programs 119
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