Business Strategies & Management Principles

Running head: BUSINESS STRATEGIES 1
Business Strategies & Management Principles
Name:
Institution:
Date:
.

BUSINESS STRATEGIES 2
Question on chapter 7
1. Standardization and Who can benefit from a format war and why?
Standardization is of promoting, developing and mandating compatible and standard
based processes and technologies in a given industry. That’s all the common situations that
hinders advancement and adoption of industry and technology. It can also be described
specifications that technically allow production to adhere to in manufacturing or production.
Format wars is described as the competition between proprietary incompatible but mutually
exclusive formats which compete within the same market. It is battles that control sources of
differentiation value for different customers (Ashford, & Hall, 2018).
How format war id due to standardization
Standardization is an important part for setting a competitive advantage on competitive
advantage. In most cases, one of the standards become a winning standard. Many companies
strategize around getting a winning formula therefore standardization leads to format war.
Who benefits from a format war and why?
Standardization has several benefits which includes ensuring compatibility between different
products and other complements used with the product. The economic benefits of format war
is reducing the products costs and complying with standards in the industry like ISO. It also
enables a company have better relationships with its customers (Stern, 2016).
2. How does an industry benefit due to standardization?
Format wars are followed by standardization. After standardization, a company is able
to comply with quality standards like ISO. The organizations also are able to optimize their

BUSINESS STRATEGIES 3
costs of operations due to their ability to standardize their services and products.
Standardization also is capable of raising profitability of the industry by cutting costs of
production with supplying of their complements. Standardization ensures that companies are
able to foster good relationships with their customers and therefore the customers are able to
acquire more confidence for a products because of standardization.
3. How competition and price wars occurs during format wars
Standardization and format wars ensures that in the industry there is a creation of a
platform where firms of different sizes compete with each other. Large companies can
compete with themselves while small firms can compete with themselves too. When there is
introduction of new technology in the market that is not compatible format wars occurs.
(Oates, Portney, & McGartland, 2018)This eventually leads to increased completion and
rivalry among different players in the market. Format wars also may lead to organizations
involving themselves in product price wars.
4. Define first and second movers. what are the advantages of being the first
mover? What are the advantages of being the second mover?
The first mover is a firm or a company that is the first to introduce certain services or
products In a given market. The firm does research and development (R&D) in developmet
of the product or service and use its resources to introduce it in the market. There would be
no competition or nil or very limited competition since it is a new entrant in the market. The
advantages of first movers is that there is establishment of customer loyalty and a strong
brand recognition. There is also more time to develop economies of scale and cost efficient
methods of product manufacturing and delivery (Dippel, Gold, & Heblich, 2015). .