Assalamualaikum to my fellow frends..
In week 5, we learn about "The Five Generic Competitive Strategies" such as Low-Cost Provider,Broad Differentiation,Focused Low-Cost,Focused Differentition and Best-Cost Provider..
So from this topics we learn the major avenues to a competitive advantage based on differentiating a company’s product or service offering from the offerings of rivals and then understand what distinguishes each of the five generic strategies and why some of these strategies work better in certain kinds of industry and competitive conditions than in others.
COST LEADERSHIP
-Aiming to become lowest cost producer
-The firm can compete on the price with every other industries and earn higher unit profits.
-Cost reduction provides the focus of the organization's strategy.
-Targets a broad market.
-Competitive advantage is achived by driving down costs.
-A successful cost leadership strategy requires that the firm is the cost leader and is unchallenged in this position.
-Especially beneficial where customers are price sensitive.
DIFFERENTIATION STRATEGY
-A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers.
-Customers perceive the product to be different and better than that of rivals.
-The value added by the uniqueness of the product may allow the firm to charge a premium price for it.
-Differentiation can be based on product image or durability, after sales, quality, additional features.
-It requires flair, research, capability, and strong marketing.
That all from me... :-)
