PPT Slide: Strategies for Managing Product Substitution Risks

Strategies for Managing Product Substitution Risks PPT

This PPT slide, part of the 654-slide Business Unit Strategy Training Program PowerPoint presentation, outlines a framework for substitution analysis, emphasizing its role in identifying both threats and opportunities within strategic engagements. It is divided into 2 main sections: "Defend against substitution" and "Promote substitution," with a central focus on actively utilizing substitution analysis.

In the "Defend against substitution" section, several strategies are presented. Improving the value of products relative to substitutes is crucial. This involves enhancing product features or customer experience to make them more appealing. Redefining competition is also highlighted, suggesting that companies should shift focus away from the strengths of substitutes, thereby altering the competitive narrative. Engaging suppliers in this defense strategy is recommended, as they can play a vital role in reinforcing product value. Lastly, the slide advises focusing on market segments that are less likely to switch to substitutes, which could provide a more stable revenue stream.

Conversely, the "Promote substitution" section offers proactive strategies. Targeting switchers early is essential, which includes investing in advertising to raise awareness among potential customers. Improving product offerings where they provide the most value is also emphasized. Reducing or eliminating switching costs can facilitate customer retention and attract new buyers. Additionally, the slide suggests selective forward integration to create demand pull, which can enhance market positioning. Finally, promoting improvements in complementary products and infrastructure can further support the adoption of the primary product.

Overall, this slide serves as a strategic guide for executives looking to navigate the complexities of market substitution, providing actionable insights for both defense and promotion strategies.

This slide is part of the Business Unit Strategy Training Program PowerPoint presentation.

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