generic strategies.pptx final

7/27/2019 Generic Strategies.pptx Final

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GENERICSTRATEGIES

Presented by:Arshad shaikh

Tulika Paul


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GENERICSTRATEGIES

They outline the three main strategic options open to

organization that wish to achieve a sustainable

competitive advantage


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STRATEGIC ORIENTATION

PORTERS THREE GENERIC STRATEGIES

UniquenessLow Cost

Position

Strategic Advantages

Differentiation Overall CostLeadership

FocusFocusDifferentiation Focus Low Cost


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COST LEADERSHIP.

The low cost leader in any market gains competitive

advantage from being able to produce at the lowest

cost.

Cost is driven down through all the elements of the

value chain. However, low cost does not always lead to low

price. Producers could price at competitive parity,exploiting the benefits of a bigger margin thancompetitors.

Toyota, is very good not only at producing highquality autos at a low price, but have the brand andmarketing skills to use a premium pricing policy.Wal-Mart is another example of low-cost strategy.


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THE SOURCESOF COST ADVANTAGES

Economies ofScale

Experience or learning-curve

Capacity Utilization

Product Design Location

Vertical Integration/Outsourcing

Value chain configuration


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DIFFERENTIATION

Differentiation means providing something unique that isvaluable to the buyer beyond simply offering a low price.

(M. Porter)

Differentiated goods and services satisfy the needs ofcustomers through a sustainable competitive advantage.This allows companies to desensitize prices and focus onvalue that generates a comparatively higher price and abetter margin.


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Understanding customer needs and

preferences

Commitment to customers

Knowledge of company's capabilities

Innovation

KEYSTO SUCCESSFUL DIFFERENTIATION


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TANGIBLE

Observable characteristics: size, color, materials, etc.

performance

packaging

complementary services

INTANGIBLE

Unobservable andsubjective characteristics

relating to image status,

exclusively, identity.

TOTAL CUSTOMER RESPONSIVENESS: Differentiation not just

about the product, it embraces the whole relationship between the

supplier and the customer.

The Nature of Differentiation

THE KEY IS CREATING VALUE FOR THE CUSTOMER


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NICHE/ FOCUSSTRATEGIES

Here the organisation focuses its effort on one

particular segment and becomes well known for

providing products/services within the segment. They form a competitive advantage for this niche

market and either succeed by being a low cost

producer or differentiator within that particular segment.

Examples include Roll Royce, Bentley or Organic food.


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generic strategies.pptx final

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