Chapter 5 : The Five Generic Competitive Strategies

Learning Objectives : 

1) Understand what distinguishes each of the five generic strategies and why some of these strategies work better in certain kinds of industry and competitive conditions than in others.

2) Gain command of the major avenues for achieving a competitive advantage based on lower costs.

3) Learn the major avenues to a competitive advantage based on differentiating a company's product or service offering from the offerings of rivals.

4) Recognize the attributes of a best-cost provider strategy-a hybrid of low-cost provider and differentiation strategies.

THE FIVE GENERIC COMPETITIVE STRATEGIES .

First : Low-Cost Provider Strategy

Striving to achieve lower overall costs than rivals on comparable products that attract a broad spectrum of buyers. (Mydin)

Second : Broad Differentiation Strategy

Seeking to differentiate the company's product offering from rivals' with superior attributes that will appeal to a broad spectrum of buyers. (Honda)

Third : Focused Low-Cost Strategy

Concentrating on a narrow buyer segment (or market niche) and outcompeting rivals on costs, thus being able to serve niche members at a lower price.(Hari-hari)

Forth : Focused Differentiation Strategy

Concentrating on a narrow buyer segment (or market niche) and outcompeting rivals with a product offering that meets the specific tastes and requirements of niche members better than the product offering of rivals.

Fifth : Best-Cost Provider Strategy

Giving customers more value for their money by satisfying buyers' expectations on key quality/features/performance/service attributes while beating their price expectations. (Adidas)