COMPETITIVE ADVANTAGE: CREATING AND SUSTAINING SUPERIOR PERFORMANCE Michael Porter Contents Introduction Chapter 1: Competitive Strategy: The Core Concepts 3 The Structural Analysis of Industries 4 Industry Structure and Buyer Needs 6 Generic Competitive Strategies 7 Cost Leadership 8 Differentiation 9 Focus 9 Stuck In The Middle 10 Sustainability 12 RISKS OF COST LEADERSHIP 12 RISKS 12 OF DIFFERENTIATION 12 RISKS 12 OF 12 FOCUS 12 Generic Strategies and Industry
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2. What are the chief elements of Costco’s strategy? Chief elements of Costco’s strategy were low prices‚ limited selection‚ and a treasure-hunt shopping environment. The ultra-low pricing strategy includes a mark-up capped at 14% and Kirkland‚ a Costco brand designed to be of equal or better quality than national brands. Product Selection is limited to 4‚000 items within a wide variety of categories. Costco does however include ancillary businesses to increase member alternatives. The loss of
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Costco Wholesale Corp.: Mission‚ Business Model‚ and Strategy What is Costco’s business model? Is the company’s business model appealing? Why or why not? Costco’s business model is focused on producing high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of national name brands and select private-label products in a wide range variety. Costco is focused in low-cost strategy is concentrated on a narrow buy segment and out competing rivals by having
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PROBLEM STATEMENT Superior Supermarkets (SS) must decide whether or not to pursue an everyday low pricing (ELP) strategy at its three Centralia MO locations. Strategic Issues & Marketing Mix Pricing: Current prices are reflective of a high-end branding strategy. SS everyday (non-promotional) prices are approximately 10% higher than Harrison (Hr) and about 7 percent higher than Grand American (GA) and Missouri Mart (MM). Subsequently‚ higher prices have become a competitive concern due to their
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Selected Answer: a stock should be purchased if it is selling near its historic low price to book ratio Question 5 0.33333 out of 0.33333 points According to the efficient market hypothesis‚ purchasing high P/E stock should not produce superior investment results. Selected Answer: True Question 6 0.33333 out of 0.33333 points According to the dividend-growth model‚ the valuation of common stock depends on 1. the firm’s dividends 2. investors’ required rate of return 3.
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Costco Wholesale Corp.: Mission‚ Business Model‚ and Strategy 1. What is Costco’s business model? Is the company’s business model appealing? Costco’s business model depends on high sales volume along with quick inventory turnover‚ which is made possible by low prices and limited product selection. This business model is appealing for them and has many benefits. Firstly‚ by setting up the business approach to rapidly turning over inventory‚ the company is often able to sell their products
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ANALYSIS OF THE BUSINESS AND FINANCIAL PERFORMANCE OF TESCO PLC [pic] (6444 words) MARCH 2008 1. INTRODUCTION 1.1 TOPIC CHOSEN This research analyses the financial situation of Tesco Plc; topic number 8. The analysis is carried from an investor’s point of view and will be achieved by evaluating key financial ratios‚ past trends and other key aspects with an aim to serve the current and prospective future investors in making investment decision. As the financial aspect is just a quantitative
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1. What is Costco’s business model? Is the company’s business model appealing? Why or why not? Costco’s business model was to generate high sales volumes and rapid inventory turnover by offering members low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise. Costco’s business model is built upon customer memberships‚ who join and renew annually. This directly monetizes customer loyalty as unsatisfied members may not renew and represents
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The retail banking concept has been expanded to include services provided to small and medium sized business and also high net worth individuals . The concept of wholesale banking In the whole sale banking the focus is on corporate‚ i.e. companies‚ firms‚ proprietorship concerns‚ Public Sector‚ Institutions‚ societies‚ Trusts‚ clubs etc. Why retail banking Since the year 1991 the process of disintermediation accelerated. The corporate had easy access to funds from the savers thus bypassing
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FINANCAIL PERFORMANCE Performance is used to indicate firm’s success‚ conditions‚ and compliance. Financial performance refers to the act of performing financial activity. In broader sense‚ financial performance refers to the degree to which financial objectives being or has been accomplished. It is the process of measuring the results of a firm’s policies and operations in monetary terms. Financial performance analysis includes analysis and interpretation of financial statements in such a way that
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