In a global marketplace, this often manifests itself as a constant downward pressures on prices, as each business struggles to maintain and expand on market share in the face of strong competition from both foreign and domestic competitors.
Magazine Competitive Strategies It is difficult for a business to survive without competitive strategies in place. This is particularly the case if the company is contending in markets overflowing with alternatives for consumers.
A competitive strategy may be defined as a long-term plan of action that a company devises towards achieving a competitive advantage over its competitors after examining the strengths and weaknesses of the latter and comparing them to its own.
Differentiation This strategy aims at developing a competitive advantage by way of making available and marketing a unique product or service — a product or service that is different in some way to what a rival or competitor is offering.
For this, you may have to spend a lot for research and developmentwhich you may not be able to afford if yours is a small business.
A successful differentiation strategy has the potential to lower price sensitivity and better brand loyalty from customers. Cost Leadership The intention behind a cost leadership strategy is to be a lower cost producer in comparison to your competitors. There are two traditional options for businesses to increase profits — decreasing costs or increasing sales.
In a cost leadership strategy, the concentration is on acquiring quality raw materials at the lowest price.
Business owners additionally need to use the best labor to convert these raw materials into valuable goods for the consumer. Thus, this strategy is especially beneficial if the market is one where price is an important factor. Focus — Differentiation Focus and Cost Focus If the business realizes that marketing to a homogenous customer niche would not be an effective line of action for a particular product the business is selling, it can adopt the focus strategy.
This strategy involves the business tailoring its marketing endeavors and service to one or more select customer segments and excluding the other segments.
There are two variants of the focus strategy. In cost focus, the aim of the business would be to have an advantage over its competitors with respect to cost in its target segment. Thus, an electronics store may have the aim of being the cheapest electronic store in a particular town but not essentially the cheapest overall.
A differentiation focus strategy takes advantage of the special needs of consumers in specific segments and seeks differentiation by way of marketing its product as unique in certain respects. For example, a company may bring out a product specifically designed for left-handers.
Classification according to Michael Treacy and Fred Wiersma Michael Treacy and Fred Wiersma are the authors of The Discipline of Market Leaders, a book published in which tells people what it takes to become a market leader and stay one.
In their book, the authors describe three value disciplines or generic competitive strategies namely operational excellence, product leadership and customer intimacy.
Operational Excellence The objective of this strategy is to achieve cost leadership. The strategy focuses on automating work procedures and manufacturing processes so as to streamline operations and bring down costs.
Operational excellence is an ideal strategy for markets where customers prefer cost to a choice.
This is frequently the situation with respect to commoditized, mature markets where cost leadership offers a medium for continued growth. Businesses that excel in this strategy have a rule-based, standardized operation and strong organizational discipline.
They are also effectively centralized. Product Leadership The intention behind this strategy is to develop a culture that continuously introduces superior goods to the market. Product leaders are aware that brilliance in creativity, teamwork, and problem-solving is crucial to their success.
These leaders are able to accomplish first-class market prices owing to the experience they develop for their customers. Included among the corporate disciplines they cultivate are research portfolio management, product management, talent management, teamwork, and marketing.
Product leaders work towards leveraging their expertise across organizational and geographical boundaries by achieving expertise in disciplines such as knowledge management and collaboration. Apple, BMW, Fidelity Investments, Pfizer and many other companies in the consumer electronics, automotive, fund management and pharmaceutical industries adopt a product leadership strategy.
Customer Intimacy As the term suggests, customer intimacy is about intimacy or closeness to the customer.
It is about precision in segmenting and targeting markets and customizing offerings to perfectly match the demands of those markets.The Army must implement a strategy for analyzing its data and providing key decision-makers with information to make well-informed decisions.
Leveraging HR Technology for Competitive Advantage 3 3. Communicate with employees when monitoring performance. Computer-based performance monitoring can be. The use of analytics in business continues to expand.
But with dramatic shortfalls in analytical talent, MSBA's are giving some candidates an advantage. – Journal of Management and Marketing Research How small business, page 2 INTRODUCTION Developing competitive advantage can be considered a .
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