BUS 800 Chapter Notes - Chapter 5: Profit Margin, Sales Operations, Product Differentiation
Document Summary
Company"s competitive strategy deals exclusively with the specifics of managements game plan for competing successfully o. Specific efforts to please customers, strengthen market position, counter the maneuvers of rivals, respond to shifting market conditions, achieve particular kind of competitive advantage. Two factors that distinguish one competitive strategies from another: company"s market target is broad or narrow, company is pursuing a competitive advantage linked to lower costs or differentiation. Powerful competitive approach in markets wit many price sensitive buyers. Achieves becomes industry"s lowest cost provider rather than just being one of perhaps several competitors with comparative low costs. Boast meaningfully lower costs than rivals: not necessarily the absolutely lowest possible cost. Increase total profits and overall return on investment. Using option 1 backfire if rivals respond with retaliatory price cuts of their own o. Aggressors price cuts fail to produce sales gains that are big enough to offset profit erosion associated with charging lower price.
