porter's competative advantages
Post on 13-Apr-2017
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What is a competitive advantage?
An advantage over competitors gained by offering consumers
greater value, either by means of lower prices or by providing greater benefits and services
Porter’s Generic Strategy Framework
Target scope Advantage(Low cost)
Advantage(Product
uniqueness)
Broad(Industry wide)
Cost Leadership Differentiation
Narrow(Market wide)
Focus Strategy(low cost)
Focus Strategy(differentiation)
Cost leadership
With this strategy, the objective is to become the lowest-cost producer in
the industry.
Why is cost leadership important?• If selling price are broadly similar, the lowest-cost
producer will enjoy the highest profits• It is very effective when many buyers are price
sensitive
Differentiation strategy
A differentiation advantage is when a business products or services are different to similar competitors.
Focus Strategy
It ideally tries to get businesses to aim at a few target markets rather
than trying to target everyone.Also known as Niche strategy
The focus strategy has two variants
Cost Focus
A firm seeks a cost advantages in its target segment
Differentiation Focus
A firm seeks differentiation in its target segment
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