Question

Read the following scenario and then determine whether the firm should make, buy, or partner in this situation. In addition to explaining why you feel your choice is superior to the other two, be sure to discuss the implications it will have for procurement.

Your organization plans to introduce a new product in the next 16–18 months. The product will rely on technology about which your organization already has some know-how. Although this product could open up new markets for your firm, you suspect that competitors are also making plans to enter this market. In fact, they are likely to have competing products out in the marketplace around the same time you expect to. Rather than compete on price, you feel that your firm’s key to strong market share will be how well you differentiate your new product from your competitors.

Answer 1

As per the given scenario i can understand that the firm is operating in a very extreme competitive market, Since it suspects that the competitors are also expected to enter into the same market which the firm is trying to enter into within the next 16-18 months. So by this we have to be careful in planning our strategy and pricing too (even competitors price it less). We can follow the generic strategy as depicted by Porter which is the Best cost strategy. Which means the company can try to provide the product with more value at a better price than the competitors or even the company can try to provide the product at the same price for which the competitors are selling but with more value to the customers is called as Best Cost Leadership strategy as depicted by porter.

So on a whole my decision would be that the firm should enter into the new market with the aid of technology which it is trying to launch a new product within the 16-18 months, because diversifying is always good let it be vertical, horizontal or even non related, always a diversification leads to expansion of business (except only in some cases which gets failed due to lack of proper strategy implementation and formulation).