Consumption chain

The consumption chainFinding opportunities for business growthYellowbird Marketing Solutions

Your Consumption ChainWhere on the consumption chain can you provide value to your customers?Yellowbird Marketing Solutions

PaymentHow does a customer pay?Optimizing the payment link can improve business in multiple ways.If the payment is more convenient, that helps to differentiate you.Copyright © 2011 Yellowbird Marketing Solutions

Sustainable Competitive AdvantageA competitive advantage exists when the firm is able to deliver the same benefits ascompetitors but at a lower cost (cost advantage), or deliver benefits that exceed those ofcompeting products (differentiation advantage). Thus, a competitive advantage enablesthe firm to create superior value for its customers and superior profits for itself.Copyright © 2011 Yellowbird Marketing Solutions

Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation)Cost Leadership StrategyThis generic strategy calls for being the low cost producer in an industry for a given levelof quality. The ﬁrm sells its products either at average industry prices to earn a proﬁthigher than that of rivals, or below the average industry prices to gain market share.Copyright © 2011 Yellowbird Marketing Solutions

Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation)Differentiation StrategyA differentiation strategy calls for the development of a product or service that offersunique attributes that are valued by customers and that customers perceive to be betterthan or different from the products of the competition.Copyright © 2011 Yellowbird Marketing Solutions

Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation)Focus StrategyThe focus strategy concentrates on a narrow segment and within that segment attempts toachieve either a cost advantage or differentiation. The premise is that the needs of thegroup can be better serviced by focusing entirely on it. A ﬁrm using a focus strategy oftenenjoys a high degree of customer loyalty, and this entrenched loyalty discourages otherﬁrms from competing directly.Copyright © 2011 Yellowbird Marketing Solutions

Advantage Target Scope Low Cost Product Uniqueness Cost Leadership Differentiation Broad (Industry Wide) Strategy Strategy Focus Focus Narrow Strategy Strategy (Market Segment) (low cost) (differentiation)Your choiceTo be successful over the long-term, a ﬁrm must select only one of these three genericstrategies. Otherwise, with more than one single generic strategy the ﬁrm will be "stuck inthe middle" and will not achieve a competitive advantage.Copyright © 2011 Yellowbird Marketing Solutions

Consumption chain

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