05Session 4 Presentation [โหมดความเข้ากันได้]

7/28/2019 05Session 4 Presentation [ ]

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The Five GenericCompetitive Strategies

Session 4

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Competitive strategy is aboutompetitive strategy is aboutbeing different. It means

deliberately choosing to performti iti diff tl t fDifferent Inputs Same activities differently or to perform

different activities than rivals toutputs,

deliver a unique mix of value.eren npu ,Different Outputs,

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Michael E. Porter


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Lo -Cost Provider Strate ies

Broad Differentiation Strate ies

Best-Cost Provider Strategies

Focused (or Market Niche) Strategies

The Contrasting Features of the Five Generic

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ompe ve ra eges: ummary


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Corporate strategy choice of direction for the firm as a whole

Directional

Parenting

Business strategy improving the competitive positionCompetitive strategy

Coo erative strateBlue Ocean Strategy

to achieve corporate and business unit objectives and

Strategies by maximizing resource productivity

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plans to compete successfully

Specific efforts to please customers

Offensive and defensive movesto counter maneuvers of rivals

Responses to prevailing market condit ions

Initiatives to strengthen its market position

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arrower n scope an us ness s ra egy


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Fig. 5.1: The Five Generic Competitive Strategies

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Low-Cost Provider Strategies

Keys to SuccessKeys to Success

Make achievement ofmeaningful lower costs

than rivals the theme of firms strategy

Include features and services in product

offering that buyers consider essential

Find approaches to achieve a cost advantage

in ways difficult for rivals to copy or match

Low-cost leadership means low overall costs, not

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us ow manu ac ur ng or pro uc on cos s


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When Does a Low-Cost

ra egy or es

Product is standardized or readily available

There are few ways to achieve

Most buyers use product in same ways

uyers ncur ow sw c ng cos s

Buyers are large and havesignificant bargaining powe

Industry newcomers use introductory low prices to

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attract buyers and build customer base


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-

Low cost methods are easily imitated by rivals

Becoming too fixated on reducing costs

Buyer interest in additional features

Declining buyer sensitivity to price

Technological breakthroughs open up cost

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reductions for rivals


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Differentiation Strategies

Incorporate differentiating features that causebrands of rivals

Keys to SuccessKeys to Success

n ways o eren a e a crea e va ue or

buyers and are not easily matched or cheaplycop e y rva s

Not s endin more to achieve differentiation

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than the price premium that can be charged


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A product / service with unique,

Which

unique?

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Uni ue taste Yakult Dr. Pe e

Multiple features Microsoft Windows and Office, Google

- Amazon.com

Su erior service -- FedEx, Ritz-Carlton

Spare parts availability Caterpillar, Toyota En ineerin desi n and erformance Mercedes BMW

Prestige Rolex

Product reliabilit ohnson & ohnson Quality manufacture Karastan, Michelin, Toyota

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Top-of-line image Ralph Lauren, Starbucks, Chanel


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Sustaining Differentiation:

eys o ompe ve van age

Those hardest for rivals to match or imitateThose buyers will find most appealing

Best choices to ain a lon e -lastin , more

profitable competitive edge

Technical superiority (MS Office, Google)

Product quality and reliability (Sony, eBay)

Comprehensive customer service (Toyota)

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Unique competitive capabilities (PTT)


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Price remiumof a differentiation strate reflects

Value actually delivered to the buyer

and ?!?

Value perceived by the buyer

Actual and perceived value can differ when buyersare unable to assess their experience with a

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product


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Signaling Value as Well

as e ver ng a ue Incomplete knowledge of buyers causes them to

udge value based on such signals as Price

Extensive ad campaigns Ad content and image e er ac tes or pro ess ona sm an

personality of employees Having a list of prestigious customers

Signals of value may be as important asactual value when

Buyers are making first-time purchases (Real Estate, MBA) Repurchase is infrequent (Cars)

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Buyers are unsophisticated (Red-Bull)


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Buyers see little value in unique attributes of product

Overspending on efforts to differentiate the product

o er ng, us ero ng pro a y(

)

Over-differentiating such that productfeatures exceed buyers needs ()

Char in a rice remium bu ers erceive is too hi h Not striving to open up meaningful gaps in quality,

- -

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products ()


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-

-

a strategic emphasis on differentiation

Give customers more value for the money

Deliver superior value by meeting or exceedingObjectives

buyer expectations on product attributes and

beating their price expectationsBe the low-cost provider of a product with good-to-

excellent roduct attributes then use cost

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advantage to underprice comparable brands


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When Does a Best-Cost

rov er ra egy or es

Where buyer diversity makesproduct differentiation the normand

Where many buyers are alsosensitive to price and value

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-

A best-cost providermay get squeezed between-

differentiation strategies

Low-cost leaders may be able to siphoncustomers away with a lower price

High-end differentiators may be able to

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the total market

Serve niche buyers better than rivals

Keys to Success

oose a mar e nc e w ere uyershave distinctive preferences, specialrequremen s, or unque nee s

Develo uni ue ca abilities to serve

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needs of target buyer segment


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eograp c unqueness - , arage

Specialized requirements in,

Special product attributes

a ealin onl to niche bu ers

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(Tattoos, Super cars )


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Cable TV

orsc eSports cars

CannondaleTo -of-the line mountain bikes

Enterprise Rent-a-Car

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Focus / Niche Strategies

an ompe ve van age

Approach 1

c eve ower cos s an rva s nserving a well-defined buyer segment

Focused low-cost strategy

Approach 2Which

hat is

unique?

Offer a product appealing to uniquepreferences of a well-defined buyer segment

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Focused differentiation strategy


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Competitors find effective ways to match

a focusers capabilities in serving niche

attributes desired by majority of buyers niche

Segment becomes so attractive it becomescrowded with rivals, causing segment profits to be

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splintered


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Deciding Which Generic

ompe ve ra egy o se Each ositions a com an differentl in its market and

competitive environment

Each establishes a central theme for how a company willen eavor o ou compe e rva s Each creates some boundaries for maneuvering as market

Each points to different ways of experimenting with thebasics of the strategy

Each entails differences in product line, productionemphasis, marketing emphasis, and means to sustain the

The big risk Selecting a stuck in the middle strategy!

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advantage or a distinctive competitive posit ion!


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Offensive and Defensive Strate iesOffensive and Defensive Strate ies

Offensive Strategies Defensive Strategies

stronger market competitive advantage

competitive advantage

advantage)

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.

.

.

-.

.

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.


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Whittle away at a rivalscompe ve a van age

-

strengths of weaker rivals

Challenging strong competitors with a lower price

u cos

advantage or advantage ofgreater financial

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trength!


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Options for AttackingOptions for Attacking

Offer e uall ood roduct at a

a ompe or a ompe or s reng ss reng s

lower price

Develop low-cost edge, then use it toun er-pr ce r va s

Leapfrog into next-generation

Add appealing new features

Construct new plant capacity in

rivals market strongholds

Offer a wider product line

Develo better customer service

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capabilities


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Attacking Competitor WeaknessesAttacking Competitor Weaknesses

Objective

Utilize company strengths to exploit a rivals

weaknesses

Weaknesses to Attack

Customers that a rival is least equipped to serve

Rivals providing ub-par customer service

Rivals with weaker marketin skills

Geographic regions where rival is weak

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ar et segments a r va sneg ect ng


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L hi Si ltL hi Si lt


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Launching SimultaneousLaunching Simultaneous

Objective

Launch several major initiatives to

-

Splinter their attention

Force them to use substantialresources to defend their position

Achallenger withsuperior resources canoverpowerweaker rivals byout-competing them across-the-

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EndEnd--Run OffensivesRun Offensives

Objectives

aneuver aroun s rong compe ors

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Approaches forApproaches for

nn -- un ens vesun ens ves

terms of competition

Build presence in geographic areas

with different features to better meet buyer needs

Introduce next-generation

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Guerrilla OffensesGuerrilla Offenses

Approach

Use principles ofsurprise and hit-and-run to

a ac n oca ons an a mes w ere con ons

are most favorable to initiator

Appeal

Well-suited to small challengers

with limited resources and

market visibility

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O tions for Guerrilla OffensesO tions for Guerrilla Offenses

,customers

Occasional low-balling on price

Intense bursts of romotional activit

Special campaigns to attract buyers from

Challenge rivals encountering problems with qualityor providing adequate technical support

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,

patent infringements, or unfair advertising


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Preemptive StrikesPreemptive Strikes

Approach

Involves moving first to secure an

advantageous position that rivals are oreclosed

or discoura ed from du licatin !

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Preem tive Strike O tionsPreem tive Strike O tions

Secure exclusive dominant access to best distributors

Secure best geographic locations

Tie up best or most sources of essential raw materials

Expand capacity ahead of demand in hopeso scouragng rva s rom o owng su

Build an image in buyers minds thatis unique or hard to copy

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offensive

Vulnerable market leaders

-

where challenger is strong

Struggling rivals on vergeof going under

Small local or regional

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U i Off i S A hi C i iU i Off i S A hi C i i


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Using Offensive Strategy to Achieve CompetitiveUsing Offensive Strategy to Achieve Competitive

van agevan age

Strate ic offensives offerin stron est basis forcompetitive advantage entail

A unique competitive capability

Much-improved performance features

Technological superiority

A cost advantage in manufacturing or distribution

Some t e of differentiation advanta e

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D f i St tD f i St t


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Defensive StrategyDefensive Strategy

Objectives

Lessen risk of being attacked

un mpac o any a ac a occurs

Influence challengers to aim attacks at other rivals

A roaches

Block avenues open to challengers

Signal challengers vigorous

retaliation is likely

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Block AvenuesBlock Avenues


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Block AvenuesBlock Avenues

Open to ChallengersOpen to Challengers Partici ate in alternative technolo ies

Introduce new features, add new models, or broaden

roduct line to close a s rivals ma ursue Maintain economy-priced models

Offer free training and support services

Make early announcements about new

Challenge quality or safety of rivals products

usin le al tactics

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Sign exclusive agreements with distributors

Signal ChallengersSignal Challengers


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Signal ChallengersSignal Challengers

e a a on s e ye a a on s e y

commitment to maintain present market share

Publicly commit firm to policy of

a n a n war c es o cas reserves

Make occasional counterresponseto moves of weaker rivals

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strategic movement as you have learned from

strategy!

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05Session 4 Presentation [โหมดความเข้ากันได้]