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After shakeout, industry is consolidated-dominated by a small number of large companies.
Strategic groups: Low cost guys, differentiated guys, focusers.
Very dependent on one another “Don't rock the boat”
Product Proliferation: Breakfast cereal
Price Cutting Market Signaling-Don’t even think about it -Southwest
Skim early on, reduce later, price low..They have the experience
Excess Capacity: Warns entrants they can be smushed
Manage Industry Relations: PRICE SIGNALING (Maintain status quo)
PRICE LEADERSHIP (Subtle -why do all cornflakes cost same within 25cents or so. Why do all hardcovers cost $25)
NON PRICE COMPETITION (Product differentiation)
Market Penetration. Expand market share in existing markets(Coke Brewing, P&G)
Product Development: Classic Coke, Upgrades
Market Development--Putting your product in new markets (Selling old people sports gear)
Product Proliferation: Stops price---features
CAPACITY CONTROL(Competition does break out. Excess capacity due to new technology, new entrants, simultaneous new moves )Preemption Collusion (OPEC)