24415 Lecture Notes - Lecture 7: Cost Leadership, Swot Analysis, Switching Barriers
Document Summary
Brings internal/external analysis together (conclusion of the tools) Attractive industry structure (hard to change but high profit potential) Cost leadership = operational effectiveness (same thing as rivals but better) Differentiation = superior comp. adv (do things different to rivals) Focus = single segment (other two are industry-wide) Firms most profitable positions are at the extremes. Don(cid:495)t want to be in the middle (cid:523)difficult to target two different markets(cid:524) Can(cid:495)t make cheap (cid:523)mass production(cid:524) and luxury products - ruins reputation. Must be clear, distinct positioning (cid:523)e. g. )kea(cid:524) so that customers don(cid:495)t get confused (cid:494)strategic fit(cid:495) strategy is doing things differently (easy to imitate vrio) * porter says that operational efficiency is not a strategy as the essence of. Few rivals are following a differentiation approach. Technological change and product innovation are fast paced. Product is standardized or readily available from many suppliers. Most buyers use product in same ways. Porters five forces and product life cycle (mature products)
