BUS 331 Chapter Notes - Chapter 5: Niche Market, Target Market, Technological Change
3 Apr 2016
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5 generic competitive strategy options help build a competitive advantage. Decide between broad/narrow market and lower costs/differentiation (1) low cost provider strategy (2) broad differentiation strategy (3) focused low-cost strategy (4) focused differentiation strategy (5) best cost provider. Goal: become the industry"s overall low-cost provider. Option 1 use low-cost edge to underprice competitors and attract price-sensitive buyers. Option 2 maintain the present price, but reduce costs to increase profit margin. Approaches to differentiation must be hard for rivals to duplicate: often best strategies are based on product innovation, tech superiority, product quality and reliability, comprehensive customer service, or unique competitive capabilities. Revamping the value chain system to increase differentiation: coordinating with channel allies to enhance customer value, coordinating with suppliers to better address customer needs. Delivering superior value via differentiation: include product attributes and user features that lower the buyer"s costs, tangible features that improve product performance, intangible features that enhance buyer satisfaction in noneconomic ways.
