Competitive Strategies
This generic strategy aims to achieve the lowest overall costs in the industry and appeal to a broad spectrum of buyers.
Low-Cost Strategy
These strategies are used to improve a company’s market position, performance, and competitive advantage.
Offensive Strategies
This strategy follows the logic “think local, act local” and tailors products and strategy to each country.
multidomestic strategy
This is the primary approach to corporate-level strategy and involves entering new industries or product markets.
diversification
These two strategy levels differ because one is about how to compete in one industry, while the other is about managing the company’s whole collection of businesses.
business-level strategy and corporate-level strategy
This strategy seeks to set a company’s product apart from rivals in ways that appeal to a broad spectrum of buyers.
broad differentiation strategy
These strategies are used to protect a company’s market position and competitive advantage.
Defensive Strategies
This strategy follows the logic “think global, act global” and offers the same products across country markets.
global strategy
This type of diversification involves entering businesses whose value chains have strategic fits with the firm’s present businesses.
related diversification
These two terms differ because one means two firms of similar size combine, while the other means one firm buys and absorbs another.
merger and acquisition
This strategy targets a narrow buyer segment and wins by offering customized attributes that better meet specialized needs and tastes.
focused differentiation strategy
This happens when one company purchases and absorbs another company.
acquisition
This international strategy combines global efficiency with local responsiveness and is often harder to implement.
transnational strategy
This type of diversification involves entering businesses with no meaningful strategic fits or value chain relationships.
unrelated diversification
These two concepts differ because one is where strong profits are earned, while the other is the use of those profits to support competition elsewhere.
profit sanctuary and cross-market subsidization
This hybrid strategy gives customers more value for the money by combining low cost with differentiation.
Best-Cost Strategy
This occurs when a firm participates in multiple stages of the same industry’s value chain.
vertical integration
This foreign market entry mode uses domestic plants as a production base and ships goods to foreign markets.
exporting
These are the three tests used to judge whether a diversification move is worthwhile.
industry attractiveness test, cost-of-entry test, and better-off test
These two options differ because one means the firm does more of the value chain itself, while the other means it lets an outside company perform the activity.
vertical integration and outsourcing
A major risk of the best-cost strategy is that the firm may fail to achieve enough low-cost advantage or enough differentiation advantage and end up here.
Stuck in the Middle
This occurs when a company contracts with an outside firm to perform activities that were previously done internally.
outsourcing
This occurs when a company uses profits earned in one country or market to support competitive actions in another market.
cross-market subsidization
This is the ultimate justification for diversification and means the move must make the combined company more valuable than the businesses would be separately.
building shareholder value
These two diversification concepts differ because one means cost savings from sharing resources across businesses, while the other means the extra value created when businesses perform better together than apart.
economies of scope and synergies