1. How to gain competitive advantage?(question of survival)
i. Porter’s Generic Strategies (5 forces)
2. Which Direction to go
i. Growth direction
a. Organic growth
Ansoff’s Product-Market Matrix
b. Joint development
ii. Defensive/Non growth strategies
a. Capital Restructure Scheme
Porter’s Generic Competitive Strategies (to achieve competitive advantage):
Competitive position is the market share, costs, prices, quality and accumulated experiences of an organization/product relative to
Competitive strategy is taking offensive or defensive action to create a defendable position in an industry, and to cope with
competitive forces yielding superior ROI.
Competitive advantage is anything which gives one organization an edge over competitors.
There are following Competitive Strategies for companies to achieve Competitive Advantage.
Lower Cost Differentiation
Broad Target Cost Leadership Differentiation
Cost Focus Differentiation Focus
Niche Focus (for luxury goods)
Differentiation is “creating value through uniqueness”. It could be at following levels of product i.e.
b). Quality level.
2. Augmented Product
i. Delivery and credit
iv. After sale service
Cost Leadership is “having lowest cost of producing”. It could be achieved by:
Mass Production (economies of scale)
Favorable access to raw materials
Minimizing overhead by exploiting bargaining power
Constantly improving efficiency and economy e.g. through value chain analysis
Focus involves a restriction of activities to only part of the market (a segment) through
Providing goods/services at lower cost (Cost focus)
Providing a differentiated product/service (Differentiation focus) Advantages/Comparison of Competitive Strategies:
Competitive Force Cost Leadership strategy