08/10/2013
-week 5-
Generic competitive
strategies
What are five generic competitive strategies? Generic competitive strategies are specific
efforts to please customers, strengthen its market position, counter the
maneuvers of rivals, respond to shifting market conditions and achieve a
particular kind of competitive advantage.
There are five competitive strategy options which is a low-cost provider
strategy, a broad differentiation, a focused low-cost strategy, a focused
differentiation strategy and a best-cost provider strategy.
Low-cost provider strategy is lower overall costs than
competitors. Successful low-cost leaders
are base on, who have the lowest industry costs. The company has two options for translating a
low-cost advantage over rivals into attractive profit performance. The first option is to use the lower-cost
edge to underprice competitors and attract price-sensitive buyers in great
enough numbers to increase profits. The
second option is to maintain the present price, be content with the present
market share and to earn a higher profit margin per unit.
Broad differentiation strategies are attractive whenever
buyers’ needs and preferences are too diverse to be fully satisfied by a
standardized product offering. In other
word, the company will prepare the goods based on higher quality for
standardized customers. Broad
differentiation strategy suitable for a customer value proposition that is
unique. Companies can conduct
differentiation strategy from many sides like unique taste, wide selection,
superior service, luxury and prestige and so on. There are lots of example for product under
broad differentiation strategy like BMW car, Bonia handbag, scholl shoes and
others.
Focused Low-cost strategy is quite similar with low-cost
strategy but the only different is about the size of the buyer group. The size of the buyer group is in a narrow
market segment. Then, focused
differentiation strategy is offering products or services based on unique
preferences in narrow market segmentation.
Broad-cost provider strategies are mixing between broad
differentiation strategy and low-cost provider strategy.
No comments:
Post a Comment