Magazine Competitive Strategies It is difficult for a business to survive without competitive strategies in place. This is particularly the case if the company is contending in markets overflowing with alternatives for consumers. A competitive strategy may be defined as a long-term plan of action that a company devises towards achieving a competitive advantage over its competitors after examining the strengths and weaknesses of the latter and comparing them to its own.
Before devising a competitive strategy, one needs to evaluate all strengths, weaknesses, opportunities, threats in the industry and then go ahead which would give one a competitive advantage.
Types of competitive strategies by Porter According to Michael Porter, competitive strategy is devised into 4 types: Cost Leadership Here, the objective of the firm is to become the lowest cost producer in the industry and is achieved by producing in large scale which enables the firm to attain economies of scale.
High capacity utilization, good bargaining power, high technology implementation are some of factors necessary to achieve cost leadership.
Differentiation leadership Under this strategy, firm maintains unique features of its products in the market thus creating a differentiating factor. With this differentiation leadership, firms target to achieve market leadership.
And firms charge a premium price for the products due to high value added features. Superior brand and quality, major distribution channels, consistent promotional support etc. Cost focus Under this strategy, firm concentrates on specific market segments and keeps its products low priced in those segments.
Such strategy helps firm to satisfy sufficient consumers and gain popularity.
Differentiation focus Under this strategy, firm aims to differentiate itself from one or two competitors, again in specific segments only. It is a clear niche marketing strategy.
Titan watches Without following anyone of above mentioned competitive strategies, it becomes very difficult for firms to sustain in competitive industry. Examples of competitive strategy There can be several examples based on the four parameters given by Michael Porter.
Some examples are given below: Micromax smart phones and mobile phones are giving good quality products at an affordable price which contain all the features which a premium phone like Apple or Samsung offers 2.
BMW offers cars which are different from other car brands. BMW cars are more technologically advanced, have better features and have got personalized services 3. Sonata watches are focused towards giving wrist watches at a low cost as compared to competitors like Rolex, Titan, Omega etc 4.
Titan watches concentrates on premium segment which includes jewels in its watches. Hence, this concludes the definition of Competitive Strategy along with its overview.
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Without a competitive strategy, your business will have a tough time attracting customers. But unfortunately, there’s no one-size-fits-all strategy that you can implement, because every business faces different challenges within different markets. However, Harvard professor Michael Porter.
Jun 30, · There are four approaches to competitive business strategy, all of which were defined as such by Michael Porter. Porter is an American academic professor . Without a competitive strategy, your business will have a tough time attracting customers.
But unfortunately, there’s no one-size-fits-all strategy that you can implement, because every business faces different challenges within different markets. Nov 23, · Competitive strategy HBR Bestseller Michael E.
Porter Awareness of the five forces can help a company understand the structure of its industry and stake out a . Competitive Strategy from Ludwig-Maximilians-Universität München (LMU).
In this six-module course, you will learn how businesses and organizations behave in situations in which strategic decisions are interdependent, i.e. where my actions affect.