An Analytical Approach to Competitive Strategy Formulation in Mature Industries

For the purpose of competitive strategy formulation, the production-marketing problem of a manufacturing firm is studied both within the context of the firm and of the competitive environment in which it operates. The firm-initiated solution, the optimal result as perceived by the firm under its internal and external constraints, is compared to the market-implied solution, the normally expected result when all the competing firms in the market are considered together. Analysis of these two solutions indicates potentially strategic areas where short and long term measures ought to be taken in order to improve and sustain the competitive position of the firm. The proposed approach is also instrumental in analytically linking the total productivity growth of an industrial firm with its competitiveness level. This feature of the approach can be used as a productivity management tool, again to improve and sustain the competitive position of the firm.