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¶ … competitive strategies that can be used. The three generic strategies are to pursue cost leadership, differentiation or status as a niche product. Cost leadership reflects a strategy that emphasizes the pursuit of high volumes, a very high level of efficiency and results in large market share with low margins as a path to profitability. The underlying logic is that there is always a large market for a cost leader, so high volumes will be achievable. Differentiation is roughly the opposite, where the company seeks to cultivate special traits that differentiate the product or brand from its competitors. This differentiation allows the company to charge more, because it reduces the consumer propensity to substitute, which means that consumers are less price sensitive. Differentiation is sometimes pursued strictly as an exercise in branding, but some companies also use innovation. A company like Apple will use both innovation and branding in pursuit of differentiation (Badenhausen, 2013). A niche strategy will see the pursuit of a small but loyal market, usually with a highly-differentiated product. Any of these strategies can be executed successful for profit, but firms seeking to tread the middle ground might often find it difficult to compete against firms that are...
One such approach is to seek out the "blue ocean." This is a riff on the differentiated or niche strategies where the firm wants to create market opportunity for itself by finding areas of opportunity where there are no competitors (Kim & Mauborgne, 2004). There is a traditional way of thinking that locks companies into their ideas, and usually into highly-competitive markets. When companies are able to break free from that thinking, they are more innovative and can find new areas of success.
In order to settle on an appropriate strategy, a firm should engage in environmental scanning. This is a process that reflects the acquisition of information and insight about the external factors that drive a business. Companies often are focused on the internal because that is something that they can control, but external factors can be important to the success or failure of a business. Indeed, if a company identifies critical factors and acts on them, that company can develop new opportunities ahead of the marketplace, and furthermore can pursue strategies that defend against negative environmental influences.
In order to formulate…
References
Badenhausen, K. (2013). Apple dominates list of world's most valuable brands. Forbes Retrieved November 18, 2013 from http://www.forbes.com/sites/kurtbadenhausen/2013/11/06/apple-dominates-list-of-the-worlds-most-valuable-brands/
Kim, W. & Mauborgne, R. (2004). Blue ocean strategy. Harvard Business Review. Retrieved November 18, 2013 from http://hbr.org/2004/10/blue-ocean-strategy/
QuickMBA. (2010). Porter's generic strategies. QuickMBA.com. Retrieved November 18, 2013 from http://www.quickmba.com/strategy/generic.shtml
Competitive Strategies and Government Policies Carnival Cruise Line: Carnival Cruise Line is a British-American cruise line headquartered in Florida, United States. It is one of the top ten cruise lines owned by Carnival Corporation & plc -- the largest operator of cruise ships in the world. Carnival Cruise line has the largest fleet size of 24 ships among all other subsidiaries of the Carnival Corporation. These ships provide deep sea cruising as
Competitive Strategies of Google and Microsoft The Battle for the Future of Search: Comparing the Brilliant, Competitive Cultures of Google and Microsoft Both Microsoft and Google have emerged as catalysts of remarkable growth in the high technology industry. Each of these companies have a very unique, finely-tuned series of strategies for managing the innovation processes, including the steps each rely on for creating new services. Each also has shown remarkable success at delivering
Competitive Strategy In a free economy, a multitude of firms compete for the business of the same customer segment. Therefore, if a firm is to succeed in attracting and retaining the maximum number of customers from the targeted segment, it must develop and successfully execute a strategy that has a distinct competitive advantage over its rivals. Thus, a competitive strategy is defined as a plan that attempts to define a position
Cost leadership Attracting more customers and gaining financial advantage over the competition as profits would increase 4 Forces the company to drastically reduce costs, meaning that product quality could suffer demises -4 0 6. Focus strategy Can achieve either of cost advantage or differentiation 4 Addresses a niche market -4 0 7. Differentiation strategy Product uniqueness which allows for the charging of a premium price to cover for the additionally incurred expenditure 5 Additional costs which will reduce overall financial gains (they will however be recuperated from
The factor for the major success of Microsoft in developing operating systems is that they usually tolerate a third party to write a program for them. Windows has managed to stay on top of its game because it has a variety of programs where one can choose from compared to MacOS distributions. Windows joined their forces with many programmers. Currently the danger of substitute systems of operation is at
Net, 2006). The power of buyers is the impact that customers have on an industry. In general, when buyer power is strong, there exists a market in which there are many suppliers and one buyer. Under such market conditions, the buyer sets the price. Buyers are strong if there are a few buyers that take up the entire market share, and are weak if the product producer can take over