5 Generic Strategies
This chapter identifies this many generic competitive strategy options a company can choose from.
Five
This strategy focuses on having lower costs than competitors and appealing to a wide range of customers.
Broad Low-Cost strategy
This strategy focuses on making a product stand out from competitors in ways that appeal to many buyers.
Broad Differentiation Strategy
This strategy targets a small, specific group of customers by offering them lower prices than competitors.
Focused Low-Cost Strategy
This investment company is used as an example of a successful low-cost strategy
Vanguard
Companies choosing a competitive strategy must decide between targeting a broad market or this smaller, narrower type of market.
A niche (narrow market segment)
Anything that has a big effect on how much it costs a company to make its product is called this.
A cost driver
Anything that makes a product more appealing or unique to buyers is called this.
A value driver
This strategy targets a small, specific group of customers by giving them special features made just for them
Focused Differentiation Strategy
This outerwear/jacket company is used as an example of a focused differentiation strategy
Canada Goose
The chapter maps out the five strategies using a matrix built on "market target" and this second dimension.
Competitive Advantage
This term describes the savings a company gets from producing goods in larger quantities.
Economies of scale
Companies use advertising, packaging, and pricing to do this - show customers why their product is valuable
Signal value
This strategy combines good quality features with a lower price than competitors
Best-Cost (Hybrid) Strategy
This popular grocery store chain is used as an example of a best-cost strategy
Trader Joe's
This term means a company's plan for beating its rivals and gaining an edge in the market.
Competitive strategy
A low cost strategy works best when many different companies sell products that are basically this.
The same (identical)
One mistake companies make with differentiation is only offering improvements that are this - small and unimportant.
Trivial (minor)
Companies using a best-cost strategy risk getting caught in the middle between low-cost companies and these kinds of companies
High-end (differentiated) companies
In the Value-Price-Cost framework, "V" stands for this.
Value
Besides low cost, this is the other main type of competitive advantage a company can pursue.
Differentiation
Cutting costs too much can cause a company's product to lose these, which is what makes customers want to buy it.
Important features
Differentiation strategies work best when customers have these - different needs and preferences
Diverse needs
One risk of a focused strategy is that competitors may try to do this to the focuser's strategy
This healthcare company in Mexico is used as an example of a focused low-cost strategy.