Description
The market for research antibodies is extremely competitive and fragmented, thus cost-leadership, differentiation and niche (focus) strategies are very difficult to examine and formulate in Michael Porter's terms. Porter's generic strategies: cost-leadership, differentiation and niche have become a dominant paradigm in competitive business environments. Porter's model has been shown to be outdated; i.e. he states that the combination of low-cost and differentiation strategies is unlikely to produce a sustainable competitive advantage. In today's market, however, to establish a sustainable competitive advantage, many businesses especially those distributing research antibodies, pursue a combination of generic strategies simultaneously. This thesis aims to refuel the debate about what specific circumstances constitute an appropriate differentiation and pricing strategy. By popularizing the idea that differentiation and low-cost are incompatible, Porter's legacy may have served to misdirect corporate strategists. This thesis develops a framework that aims to identify the contingencies under which the above propositions hold for the research antibody industry. This thesis examines key questions raised in the analysis of the research antibody industry: (1) Will the strategy found among antibody suppliers resemble Porter's generic strategies? (2) Are there performance differences among antibody suppliers pursuing different types of strategies? (3) Are there differences in the product differentiation and pricing strategies among antibody suppliers? Multivariable cluster analyses were used to define strategic groups along current antibody sellers using normalized data from external sources (market research reports). Conjoint analysis survey design in combination with multivariable cluster analyses were used to define strategic groups along the dimensions of cost, antibody applications (e.g. Western Blot, IF, FC etc.) and product citations (as factors of differentiation in a combinatorial matrix of nine buyer choices). A survey using nine consideration sets was executed, and data of the responders analyzed using a combination of hierarchical clustering and non-negative matrix factorization (NMF). The respondent profiles were inferred and characterized by their dominant behavior. A course division was made between 'smart' and 'thrifty' buyers in favor of the first. The behavior of the 'smart' buyers is driven predominantly by product citations and less by application provided by the seller. Findings suggest that antibody suppliers use integrated strategies combining elements of cost-leadership and differentiation, an outcome which departs from classic Porter models. The researcher's survey results propose large differences in performance among current players in the market for research antibodies. From the survey, the researcher infers that a successful strategy in the antibody market should be a blend of cost-leadership (47-42%) quality differentiation (53-58%).
