Comp Strategy
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. 5-2 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.” value.”
Michael E. Porter
Chapter Roadmap
Five Competitive Strategies Low-Cost Provider Strategies Differentiation Strategies Best-Cost Provider Strategies Focused (or Market Niche) Strategies The Contrasting Features of the Five Generic Competitive Strategies: A Summary
5-4 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
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
What Is “Competitive Strategy”? “Competitive Strategy”? 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
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
5-5 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Narrower in scope than business strategy
5-6 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
1
Fig. 5.1: The Five Generic Competitive Strategies
Low-Cost Low-Cost Provider Strategies LowKeys to Success
Make achievement of meaningful lower costs than rivals the theme of firm’s strategy
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. 5-2 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.” value.”
Michael E. Porter
Chapter Roadmap
Five Competitive Strategies Low-Cost Provider Strategies Differentiation Strategies Best-Cost Provider Strategies Focused (or Market Niche) Strategies The Contrasting Features of the Five Generic Competitive Strategies: A Summary
5-4 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
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
What Is “Competitive Strategy”? “Competitive Strategy”? 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
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
5-5 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Narrower in scope than business strategy
5-6 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
1
Fig. 5.1: The Five Generic Competitive Strategies
Low-Cost Low-Cost Provider Strategies LowKeys to Success
Make achievement of meaningful lower costs than rivals the theme of firm’s strategy