Management
Please teply to those 2 posts:
1-Competitive strategies are a very important aspect to every business that operates in the business lifestyle because without strategies put into place, you have to always worry about what your competitors are doing and if they are learning new ways while your company is not. I want to first define what a competitive strategy is before I dive deeper into the discussion because we can talk about the different strategies in the image depicted within the discussion, but if we do not understand what a competitive strategy is than we might still be lost. A competitive strategy is best defined as a long-term action plan of a company which is directed to gain competitive advantage over its rivals after evaluating their strengths, weaknesses, opportunities, and threats in the industry and compare it with your own (Marketing Tutor, 2022). I like how that definition includes the SWOT terms because once a SWOT is conducted than you can understand where you can gain competitive advantage over competitors which is where a competitive strategy is determined. Now that we have an idea of what a competitive strategy is, we can go into further detail about the four different forms of competitive strategies depicted in the chart within the discussion.
Overall Low-Cost Provider Strategy This strategy is when a low-cost provider seeks to sell its products at the lowest price it can, while still making a profit so that it can draw customers to the market. This is the broad version of the low-cost strategy because such companies try to appeal to a broad market (LaMarco, 2018). The best business that I personally think would operate under this form of competitive strategy because they receive their products cheaper as they buy more in bulk, and then they draw customers in with low prices to keep their customers coming back in the future. The best thing about it for Walmart is that they still make a profit off of what they sell while bringing in new customers every day.
Broad Differentiation Strategy This strategy consists of building a brand or business that is different in some way from its competition. It is applied to the industry and will appeal to a vast range of consumers (Indeed, 2021). Two major companies that follow the broad differentiation strategy would be BMW and Apple as these two companies focus on developing innovative products for the broad market (Awware, 2021). We all know that cell phones have been around for quite some time now, and Apple became the first company to innovate and create the iPhone which is now the most well-known phone in the world.
Focused Low-Cost Strategy This is a strategy that is when the firm focuses on a narrow customer segment and provides low-cost services and products. They are able to improve their costs by focusing on a narrow market. They leverage experience, and predictability to be able to offer low costs. (Ong, 2017). The perfect example for a company of this is Chevrolet when they launched the 2020 Chevrolet Spark which was a low-cost car that is targeting green customers who are environmentally friendly.
Focused Differentiation Strategy This is when the firm focuses on a narrow segment and gives its customers products or services with distinct attributes that other firms find difficulty doing. (Ong, 2017). A company example of this is Mr. Lube as they focus on just giving oil changes (focused) and are able to do this service at a very expedient rate (differentiation) (Ong, 2017). Companies like Mr. Lube are great candidates for this form of strategy because they are known for things such as oil changes and customers do not expect anything more than that from those companies.
2-1. Low cost provider – targets broad cross-section of the market offering lower overall cost than competitors.
2. Broad differentiation – targets broad cross section of the market offering buyers something attractively different than competitors
3. Focused low-cost strategy- targets narrow market niche where buyer needs and preferences are distinctively different; offers lower overall cost than rivals
4. Focused differentiation strategy- targets narrow market niche where buyer needs and preferences are distinctively different; offers product attributes that appeal specifically to niche members
5. Best-cost provider strategy- target value conscious buyers in a middle market range; offers better goods at attractive prices.
Low cost provider Firmly establish efficient production facilities, go all out to reduce costs based on experience, pay close attention to cost and overhead costs control, and minimize research and development, services, marketing, advertising and other costs cost. In order to achieve these goals, we must attach great importance to cost management. While quality, service and more cannot be overlooked, the whole strategy is to keep costs below competitors.
Differentiation strategies differentiate the services provided by a product or company and create something unique across the industry. There are many ways to implement a differentiation strategy: designing a brand image, technical distinctiveness, performance characteristics, customer service, business networking, and other uniqueness. Ideally, companies have differentiated features in several ways
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