Strategic Management Review

In: Business and Management

Submitted By shwang0215
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Strategic Midterm 2 Review
Ch.5 Five Generic Competitive Strategies
-There are several basic approaches to competing successfully and gaining competitive advantage, but they all involve giving buyers what they perceive as superior value compared to rivals.
-competitive strategy deals exclusively with the specifics of management’s game plan for competitng successfully.
-Two biggest factors that distinguish one competitive strategy from another 1)whether company’s market target is too board/narrow 2)whether the company is pursuing a Competitive advantage linked to lower costs or differentiation.
-these two factors give rise to 5 competitive strategy options
1)a low-cost provider strategy-striving to achieve lower overall cost than rivals
2)a broad differentiation strategy-seeking to differentiate product/service from rival
3)a focused low-cost strategy-concentrating on narrow buyer segment& competing rivals by lower cost thus serve niche members at low price
4)a focused differentiation strategy-concentrating and outcompetiting rivals by differentiation
5)a best cost provider strategy-giving customers more value for the money by satisfying buyers’ expectations on key quality…etc while beating their price. Hybrid of low cost and differentiation.
-a company must decide which five basic strategies to employ.

-two options 1)use lower cost edge to underprice competitotrs and attract price sensitive buyers 2) maintain present price and use lower cost edge to earn higher profit margin on each unit sold
-coast saving approaches: capture available economies of scale, taking advantage of experience, operate at full capacity, substitute lower to cost inputs, production technology and design, communication system and info tech, bargaining power, outsourcing or vertical integration, labor productivity and compensation cost.
-revamping value…...

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