Generic Strategies

"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- Professor and Co founder of Monitor Consulting}

Assalamualaikum.We meet again in this new entry.I'm always waiting for the time to share with all of you about some experience and knowledge that I had learnt. =)

There are several basic approaches to competing successfully and gaining a competitive advantage over rivals,but they all involve delivering more value to the customer than rivals or delivering value more efficiently than rivals(or both).More value for the customer can mean a good product at a lower price,a superior product that is worth paying more for,or a best-value offering that represents an attractive combination of price,features,service,and other appealing attributes.

Besides,greater efficiency means delivering a given level of value to customers at a lower cost to the company.But whatever approach to delivering value the company takes,it nearly always requires performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match or trump.

Actually,there are FIVE GENERIC COMPETITIVE STRATEGIES :

• A low-cost provider strategy
• A broad differentiation strategy
• A focused low-cost strategy
• A focused differentiation strategy
• A best-cost provider strategy

I would like to focus for four categories of generic business strategies which are broad cost-leadership,focused cost-leadership,broad differentiation and focus differentiation.

(1) BROAD COST-LEADERSHIP :

Wow!! ... Just heard about MYDIN...then we can imagine the LOWEST PRICE. A company achieves low-cost leadership when it becomes the industry's lowest-cost provider rather than just being one of perhaps several competitors with comparatively low costs.Successful low-cost providers boast meaningfully lower costs than rivals but not necessarily the absolutely lowest possible cost.

(2) FOCUSED-COST LEADERSHIP :

A focused strategy based on low cost aims at securing a competitive advantage by serving buyers in the target market niche at a lower cost and lower price than those of rival competitors.This strategy has considerable attraction when a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.For example AIR ASIA.They still can compete with other companies like MAS,Firefly and Malindo because they give the low price to the customers.Nowadays,many people like to fly with AIR ASIA especially to travel in domestic rather than use other transports.

(3) BROAD DIFFERENTIATION :

Differentiation strategies are attractive whenever buyers' needs and preferences are too diverse to be fully satisfied by a standardized product offering.A differentiation strategy calls for a customer value proposition that is unique. The strategy achieves its aim when an attractively large number of buyers find the customers value proposition appealing and become strongly attached to a company's differentiated attributes.For example Porsche.

(4) FOCUSED DIFFERENTIATION :

Focused differentiation strategies are keyed to offering products or services designed to appeal to the unique preferences and needs of a narrow,well-defined group of buyers.For example Louis Vuitton.