33:620:301 Lecture 3: Session 3D- Strategic Management Executing Strategy
23 Feb 2019
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Document Summary
Low-cost provider: achieve low overall costs than rivals on products that attract a broad range of buyers. The objective is to have meaningfully lower costs than rivals but not necessarily the lowest possible cost. Can potentially lead to price wars if competitors also lower their prices. To achieve a low-cost advantage over rivals, a firm"s total costs across its rival chain must be lower than competitors" total costs. Perform value chain activities more cost-effectively than rivals. Restructure the firm"s overall value chain to eliminate or bypass some cost-producing activities. Firm must manage cost drivers , which are factors that have a strong influence on a company"s costs. Offer unique product attributes that a wide range of buyers find appealing and worth paying more for. Can be based on tangible or intangible attributes. Value driver- a factor that can have a strong differentiating effect. Target a narrow part of the market.
