Strategic management is about gaining and sustaining competitive advantage. From environmental scanning to vision statement to strategy formulation strategic planning and implementation —all these components have been successfully used to develop a competitive advantage. Business leaders make strategic decisions.
New jingles appear on the television, and new advertising techniques pop up and return all of the time. A business major involves a surprising amount of creativity, but exactly how do businesses compete?
There are four approaches to competitive business strategy, all of which were defined as such by Michael Porter.
5 Generic Competitive Strategies DescriptionThe "The Five Generic Competitive Strategies" are as follows: Low-Cost Provider Strategy; Broad Differentiation. Jan 11, · The concept of competitive advantage is embedded in the key components of the strategic management process. Strategic management is about gaining and sustain. IESE Business School Competitive Strategy 3 5. Content and Methodology This course is divided in different parts: The value system of the sector.
Porter is an American academic professor at Harvard, widely known for his theories about business and economics. Clustering Of the theories, one notable aspect of interest is clustering. Have you ever noticed how there are always multiple fast food places on the same road?
While fast food places are most easy to notice, all businesses actually do this.
Clusters of law firms or bakeries or even clothing or jewelry shops exist everywhere. This clustering creates competition between the businesses for the people in that area, and in fact benefits the businesses as a whole. By being so close together, each business is forced to get better and better to keep up with the surrounding businesses.
Certain areas become known for a specific superior skill set or attraction due to the competition enforcing quality within the businesses. The Four Types of Competition A business can either do a focus or a leadership type approach to competition. In a focus, the business aims to have an advantage over a couple of the other businesses, e.
In a leadership, however, the business aims to have a complete advantage over all other businesses - generally through some form of differentiation. Differentiation is what distinctly makes a business stand out, i.
Therefore, the four types of competition are cost leadership, differentiation leadership, cost focus, and differentiation focus. In a cost leadership approach, a business will generally mass produce to drive prices really low, gaining an advantage in pricing.
In a differentiation leadership, generally the business will create a distinct and attractive differentiation aspect, then use it to drive prices higher. In a cost focus, the business will focus on a specific thing to lower costs and gain customer popularity.
And lastly, in a differentiation focus, a business targets customers who refrain from buying products from competitors due to a small missing feature.
The business will adopt this feature as a niche and therefore win over those customers. The Big Picture By implementing each of these techniques, businesses are choosing what they want to be known for.
They're all aiming to gain an advantage in the overall competition, but in different ways, which will earn them different types of reputations. Hopefully, this will lead to them choosing to support the company in the future. In short, think of what you want your business to be known for before choosing a technique, though all will help you in the long run.Paired with humorous elements and illustrating examples, the Competitive Strategy and Organization Design specialization is the ideal choice for curious individuals who enjoy unique learning experiences and innovative teaching rutadeltambor.com: Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope.
There are three/four generic strategies, either lower cost, differentiated, or focus.A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a.
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.
This article discusses what is a competitive strategy?, types of competitive strategies, how to. Jun 30, · AMA: 5 Competitive Strategies of Successful (and Ethical) Companies About the Author Nicole is a business writer with nearly two decades of hands-on and publishing experience.
Without a competitive strategy, your business will have a tough time attracting customers. But unfortunately, there’s no one-size-fits-all strategy that you can implement, because every business faces different challenges within different markets. IESE Business School Competitive Strategy 3 5.
Content and Methodology This course is divided in different parts: The value system of the sector.