Assalamualaikum. Good morning, everyone!! :)
As I promised before this, right now i will share what i had learned in the Chapter 5, which was about FIVE GENERIC COMPETITIVE STRATEGIES. This tool strategy was originally came from Micheal Porter, who was also the ones that introduced The Five Forces.
Key factor that distinguish ones strategy from the other :-
- Market Target - Is the firm's market target broad or narrow?
- Competitive Advantages - Is the competitive advantage pursued linked to low costs or product differentiation?
The 5 Generic Competitive Strategies are :-
*LOW-COST PROVIDER - Striving to achieve lower overall costs than rivals on products that attract a broad spectrum of buyers. Successful low-cost leaders, who have the lowest industry costs, are exceptionally good at finding ways to drive costs out of their businesses and still provide a product or service that buyers find acceptable.
Example : AIR ASIA
*BROAD DIFFERENTIATION - Differentiating the firm's product offering from rival's with attributes that appeal to a broad spectrum of buyers. Usually, it use higher prices to recoup differentiation costs.
Example : APPLE
*FOCUSED LOW COST - Concentrating on narrow price-sensitive buyer segment and on costs to offer a lower-priced product.
Example : GIANT
*FOCUS DIFFERENTIATION - concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members.
Example : FERRARI
*BEST-COST PROVIDER - Giving customers more value for the money by offering upscale product attributes at a lower cost than rivals. (combination of 4 strategies)
So, it's up to the company which strategies that they want to use for their product. But, before that, the company must identify first, their strengths, weaknesses and competitive advantages, so that they can choose the suitable/best strategies to stay compete in the business area.
See you in next day with other interesting post and with more pictures.
Assalamualaikum:)
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