Scribd
Upload
6 views3 pages

11 STGM

Competitive strategies in strategic management are approaches organizations use to gain a competitive advantage, focusing on cost leadership, differentiation, focus, blue ocean, hybrid, disruptive innovation, strategic alliances, and digital strategies. These strategies aim to optimize resources, meet customer needs, and outperform competitors. Examples include companies like IKEA, Tesla, and Amazon, which utilize various strategies to achieve market success.

Uploaded by

Faisal Malik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
6 views3 pages

11 STGM

Competitive strategies in strategic management are approaches organizations use to gain a competitive advantage, focusing on cost leadership, differentiation, focus, blue ocean, hybrid, disruptive innovation, strategic alliances, and digital strategies. These strategies aim to optimize resources, meet customer needs, and outperform competitors. Examples include companies like IKEA, Tesla, and Amazon, which utilize various strategies to achieve market success.

Uploaded by

Faisal Malik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Competitive strategies in strategic management

Competitive strategies in strategic management refer to the approaches organizations adopt to


achieve a competitive advantage in the market. These strategies focus on differentiating the
business, optimizing resources, and meeting customer needs effectively to outperform
competitors. Below are the key types of competitive strategies, commonly based on Michael
Porter's generic strategies:

1. Cost Leadership Strategy


A "cost leadership strategy" means a business approach where a company aims to gain a
competitive advantage by becoming the lowest-cost producer in its industry, achieving
this by minimizing operational costs to offer products or services at a lower price than
competitors, thereby attracting price-sensitive customers and gaining market
share; essentially, focusing on being the most efficient producer to sell at a lower price
than rivals.

Examples of companies utilizing a cost leadership strategy include: IKEA (by offering self-
assembly furniture to reduce costs), McDonald's (standardized menu and efficient operations for
low prices), Walmart (optimized supply chain management for low costs), Ryanair (low-cost
airline with minimal frills), and Maruti Suzuki (large production volumes to achieve economies
of scale)

2. Differentiation Strategy

A differentiation strategy is a business approach that aims to make a company's products or


services stand out from competitors. The goal is to gain a competitive edge by creating a unique
offering that addresses unmet needs in the market.

Here are some ways a business can differentiate itself:

 Product differentiation: Highlight a product's unique features, lower prices, or better


quality.
 Service differentiation: Offer premium customer support, added benefits, or other
supporting elements like training, installation, and ease of ordering.
 Pricing differentiation: Adjust prices based on customer traits, competitor pricing, or
market demand. This is also known as price discrimination.
 Distribution differentiation: Choose distribution channels that provide coverage,
availability, or immediate access to expertise
3. Focus Strategy

 A focus strategy is a business strategy that helps a company identify a specific market
segment to target and develop products for. The goal is to offer a product that is desirable
to that segment, either by being of high quality, distinctive, or having a lower cost than
competitors. Focus strategy involves targeting your products to a niche market or targeted
audience. The idea behind focus strategy is developing, marketing and selling products or
services to a niche market, such as a particular type of consumer, a specific product line
or a targeted geographical area.
 Example: Budget airlines like Ryanair.

4. Blue Ocean Strategy

o Blue Ocean Strategy refers to a business approach that focuses on creating


uncontested market space rather than competing in existing market spaces
dominated by rivals. It involves simultaneously pursuing differentiation and low-
cost strategies to attract new customers and create new demand.
o Example: Tesla upsetting the luxury car market with electric vehicles

5. Hybrid Strategy

 A hybrid strategy is a business approach that combines two or more different strategies to
create a more effective plan. The goal is to combine the strengths of each strategy to
address changing market conditions, optimize strengths, and reduce risks
 Example: Toyota (affordable yet high-quality vehicles).

6. Disruptive Innovation Strategy

 Disruptive innovation is a strategy that involves a company challenging an established


business by offering a product, service, or concept that is regular, more affordable, or
accessible to a wider audience. This can be done by entering the market at the bottom and
then moving up-market.
 Example: Netflix disrupting traditional cable TV.
7. Strategic Alliances and Collaboration

A "strategic alliance" refers to a partnership between two or more companies where they
collaborate on a specific goal, leveraging each other's strengths and resources while maintaining
their separate identities, typically aiming to expand into new markets, innovate faster, or gain a
competitive edge by pooling expertise and sharing risks.
Partners may provide the strategic alliance with resources such as products, distribution
channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or
intellectual property.

8. Digital and Data-Driven Strategies

 A "digital and data-driven strategy" refers to a business approach where decisions are
made based on analyzing large amounts of digital data collected from various online
sources, like customer interactions, website traffic, and social media engagement, to
inform marketing campaigns, product development, and overall business operations,
allowing for more targeted and effective strategies across digital platforms
 Example: Amazon using data analytics for personalized recommendations.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy