Download Full PowerPoint Click Here
Slide 1: The Five Generic Competitive Strategies.
Slide 2: Strategy and Competitive Advantage.
Slide 3: The Five Generic Competitive Strategies.
Slide 4: Low-Cost Provider Strategies Keys to Success.
Slide 5: Approaches to Securing a Cost Advantage.
Slide 6: Keys to Success in Achieving Low-Cost Leadership.
Slide 7: Characteristics of a Low-Cost Provider.
Slide 1: The Five Generic Competitive Strategies.
Slide 2: Strategy and Competitive Advantage.
¢Competitive advantage exists
when a firm’s strategy gives it an edge in
—Attracting customers and
—Defending against
competitive forces.
—
¢Convince
customers firm’s product / service offers superior value.
—A good product at a low price.
—A superior product worth
paying more for.
—A best-value product.
Slide 3: The Five Generic Competitive Strategies.
Slide 4: Low-Cost Provider Strategies Keys to Success.
—Make
achievement of meaningful lower costs
than rivals the theme of firm’s strategy.
than rivals the theme of firm’s strategy.
—Include
features and services in product
offering that buyers consider essential.
offering that buyers consider essential.
—Find
approaches to achieve a cost advantage
in ways difficult for rivals to copy or match.—
in ways difficult for rivals to copy or match.—
Low-cost
leadership means low overall costs, not
just low manufacturing or production costs!
Slide 5: Approaches to Securing a Cost Advantage.
Approach 1
Do a better job than rivals of
performing value chain activities
efficiently and cost effectively.
performing value chain activities
efficiently and cost effectively.
Approach 2
Revamp value chain to bypass
cost-producing activities that add little
value from the buyer’s perspective .
cost-producing activities that add little
value from the buyer’s perspective .
Slide 6: Keys to Success in Achieving Low-Cost Leadership.
¢Scrutinize each cost-creating activity, identifying cost
drivers.
¢Use knowledge about cost drivers to manage
costs of each activity down year after year.
costs of each activity down year after year.
¢Find ways to restructure value chain to
eliminate
nonessential work steps and low-value activities.
nonessential work steps and low-value activities.
¢Work diligently to create cost-conscious corporate cultures.
—Feature broad employee participation in continuous
cost-improvement efforts and limited benefits for executives.
—Strive to operate with exceptionally small corporate staffs
¢Aggressively pursue investments in resources and capabilities
that promise to drive costs out of the business.
Slide 7: Characteristics of a Low-Cost Provider.
¢Cost
conscious corporate culture.
¢Employee
participation in cost-control efforts.
¢Ongoing
efforts to benchmark costs.
¢Intensive
scrutiny of budget requests.
¢Programs
promoting continuous cost improvement.
Successful
low-cost producers champion
frugality but wisely and aggressively
invest in cost-saving improvements !
Slide 8: When Does a
Low-Cost Strategy Work Best?
- — Price competition is vigorous.
- —Product is standardized or readily available from many suppliers.
- — There are few ways to achieve differentiation that have value to buyers.
- —Most buyers use product in same ways.
- — Buyers incur low switching costs.
- — Buyers are large and have significant bargaining power.
- — Industry newcomers use introductory low prices to attract buyers and build customer base.
Slide 9: Pitfalls of Low-Cost
Strategies.
- — Being overly aggressive in cutting price.
- — Low cost methods are easily imitated by rivals.
- —Becoming too fixated on reducing costs and ignoring.
- — Buyer interest in additional features.
- — Declining buyer sensitivity to price.
- —Changes in how the product is used.
- —Technological breakthroughs open up cost reductions for rivals.
Slide 10: Differentiation Strategies.
Objective
¢Incorporate
differentiating
features that cause buyers to prefer firm’s product or service over
brands of rivals.
Keys
to Success
¢Find ways
to differentiate that create value for
buyers and are not easily matched or cheaply copied by
rivals.
¢Not spending more to
achieve differentiation
than the price premium that can be charged.
than the price premium that can be charged.
Slide 11: Benefits
of Successful Differentiation.
A product / service with unique, appealing attributes allows
a firm to
èCommand a premium price and/or
èIncrease unit sales
and/or
èBuild
brand loyalty
= Competitive Advantage
Slide 12: Types
of Differentiation Themes
- žUnique taste – Dr. Pepper
- ž Multiple features – Microsoft Windows and Office
- ž Wide selection and one-stop shopping – Home Depot, Amazon.com
- žSuperior service -- FedEx, Ritz-Carlton
- ž Spare parts availability – Caterpillar
- ž Engineering design and performance – Mercedes, BMW
- ž Prestige – Rolex
- ž Product reliability – Johnson & Johnson
- ž Quality manufacture – Karastan, Michelin, Toyota
- ž Technological leadership – 3M Corporation
- ž Top-of-line image – Ralph Lauren, Starbucks, Chanel
No comments:
Post a Comment