Lecture 7Competitive Strategies
Lecture 7 Competitive Strategies
Generic strategies of PorterSources of competitiveadvantageDifferentiationLow costBroadmarketDifferentiationCost LeadershipScope ofcompetitionNichemarketNiche/focus
Generic strategies of Porter Cost Leadership Differentiation Niche/focus Sources of competitive advantage Low cost Differentiation Broad market Niche market Scope of competition
Cost LeadershipCompetitive advantage:low cost-Pricestrategy- profit of low cost companyContext- Customersensitivetoprice-Fewwaystoachievedifferentiation-Customernotcareforbrands-Alotofbargaining
Cost Leadership • Competitive advantage: low cost – Price strategy – profit of low cost company • Context – Customer sensitive to price – Few ways to achieve differentiation – Customer not care for brands – A lot of bargaining
How to achieve low cost Scale economic and Learning curve (experiencecurve)- Scaleeconomic:Limited by the nature of the businessproducts, market, and the management- Experience curve: familiarity, specialization, tacit knowledge,innovation,standardThedifferencebetweencompaniesinlearning
How to achieve low cost • Scale economic and Learning curve（experience curve） – Scale economic: Limited by the nature of the business, products, market, and the management – Experience curve: familiarity, specialization, tacit knowledge, innovation, standard – The difference between companies in learning
.Reducetransactioncost.others-Thedesignoftheproductsandprocess- Takefulladvantageofthe capacity-Thesiteofthebusiness-Thetimeofentering
• Reduce transaction cost • others – The design of the products and process – Take full advantage of the capacity – The site of the business – The time of entering