5 Generic StrategiesPower Point Set 5
Chapter
5
The Five Generic
Competitive Strategies
Screen graphics created by:
Jana F. Kuzmicki, Ph.D.
Troy State University-Florida and Western Region
5-1 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
“Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.”
Michael E. Porter
Strategy and
Competitive Advantage
Competitive advantage exists when a firm’s strategy
gives it an edge in
Attracting customers and
Defending against competitive forces
Key to Gaining a Competitive Advantage
Convince customers firm’s product / service offers
superior value
A good product at a low price
A superior product worth paying more for
A best-value product
5-3 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
What Is
“Competitive Strategy”?
Deals exclusively with a company’s
business plans to compete successfully
Specific efforts to please customers
Offensive and defensive moves to counter maneuvers of rivals
Responses to prevailing market conditions
Initiatives to strengthen its market position
Narrower in scope than business strategy
5-4 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Fig. 5.1: The Five Generic
Competitive Strategies
5-5 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Low-Cost Provider Strategies
Keys to Success
Make achievement of meaningful lower costs
than rivals the theme of firm’s strategy
Include features and services in product
offering that buyers consider essential
Find approaches to achieve a cost advantage
in ways difficult for rivals to copy or match
Low-cost leadership means low overall costs, not just low manufacturing or production costs!
5-6 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
5
The Five Generic
Competitive Strategies
Screen graphics created by:
Jana F. Kuzmicki, Ph.D.
Troy State University-Florida and Western Region
5-1 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
“Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.”
Michael E. Porter
Strategy and
Competitive Advantage
Competitive advantage exists when a firm’s strategy
gives it an edge in
Attracting customers and
Defending against competitive forces
Key to Gaining a Competitive Advantage
Convince customers firm’s product / service offers
superior value
A good product at a low price
A superior product worth paying more for
A best-value product
5-3 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
What Is
“Competitive Strategy”?
Deals exclusively with a company’s
business plans to compete successfully
Specific efforts to please customers
Offensive and defensive moves to counter maneuvers of rivals
Responses to prevailing market conditions
Initiatives to strengthen its market position
Narrower in scope than business strategy
5-4 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Fig. 5.1: The Five Generic
Competitive Strategies
5-5 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Low-Cost Provider Strategies
Keys to Success
Make achievement of meaningful lower costs
than rivals the theme of firm’s strategy
Include features and services in product
offering that buyers consider essential
Find approaches to achieve a cost advantage
in ways difficult for rivals to copy or match
Low-cost leadership means low overall costs, not just low manufacturing or production costs!
5-6 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.