strategic management

1. Generic competitive
strategies
Presentation by
Abdulkarim khanapuri
MB161001
Submitted to
Mr. Mahantesh Kuri

2. GENERIC COMPETATIVE STRATERGY
 The competitive theory was proposed by Michel
porter in 1980.
 Competitive strategy is a long term action plan for
how a firm will compete after evaluating its
strengths and weaknesses.
 Competitive strategy is defined as a “ frame
work” for making decision that create result in
competitive market.”

3. An advantage over competitors gained by
offering consumers greater value, either by
means of lower prices or by providing greater
benefits and services that justifies higher prices.
Competitive advantage?

4. Cost
leadership
Differentiation
Strategy
Cost
leadership
Focus
Differentiation
Focus
Broad
Narrow
Cost Differentiation
Source of competitive advantage
Marketswherebusinesscompetes

5. TYPES OF STRATEGIES
1. Cost leadership
2. Differentiation strategy
3. Focused strategies

6. COST LEADERSHIP
─ The lowest cost producers or distributor within there industry.
─ The objective is to become the lowest-cost operator.
─ Involves production on a large scale which enables the business to
exploit economies of scale.
─ The cost leadership strategy always Target a broad market.
Advantages of Cost Leadership
─ Builds up an aggressive edge of competition, by offering low prices
to potential customers because of low cost
─ Cost leader gets an advantage of reducing its price in case the
substitute product enters into the market

7. Walmart:
• Famous for EDLP; is a pricing
strategy promising consumers
a low price without the need to
wait for sale price events or
comparison shopping.
Micromax phones:
• low budget android phones for
consumers.
• Around 2014 & 2015 company
gained lot of market share.

8. DIFFERENTIATION STRATEGY
─A differentiation strategy calls for the development of a product or services
that offers unique attributes that are valued by customer.
─Customer perceive the product to be different and better than Or different
from the products of the competitors.
─The value added by the uniqueness of the product may allow the firm to
charge a premium price for it.
─The firm hopes that the higher price will be sufficient to cover the extra
costs incurred in offering the unique product.
─It includes product image or durability, after sales service, quality &
additional features.

9.  Ways to achieve differentiation
─ Superior product quality
─ Branding
─ Wide distribution
─ Sustained promotion
 Advantages of differentiation
─ Strategy enables the company to charge a premium price to
customers
─ Helps the company to have a dominant brand image in the
market.
 Limitation of differentiation
─ The sustainability of the brand uniqueness is in doubt
because competitors might imitate it

10. Google Pixel
─ Differentiation by
─ Camera
Examples
Duracell batteries
─ Differentiation by
─ Durability
Duracell batteries
─ Differentiation by
─ Reliability

11. FOCUSED STRATEGY
─ Companies use Focus strategies to concentrate on a particular
market by understanding the dynamics of that market and the
unique needs of customers within it.
─ This helps the companies to develop uniquely low cost or
well-specified products for the market
─ They tend to build a strong brand loyalty amongst the
customers.

12. Focus Strategies
Focused
low Cost
Focused
Differentiation

13. FOCUSED LOW COST
STRATEGY
─ It aims at securing competitive advantage by selling
products at lower prices than those of its
competitors.
─ It concentrates on selling products at a low cost to a
narrow target segment.
─ The main objective is to serve niche buyers better
than the rivals.

14. One plus
Differentiated by
• Advanced features at a price much lower than
it’s competitors.
• Specially targeted at geeks and software
developers who want to customize the device
to a great extent
• Value for money flagship device
Examples

15. FOCUSED DIFFERENTIATION
STRATEGY
─ Pursuing strategic differentiation within a focused
market.
─ A company aims to differentiate its products within a
small number of target market segments.
─ Focused differentiation strategy is most effective when
consumers have different preferences or requirements
and when rival firms are not attempting to specialize in
the same target segment.

16. Apple Inc.
Differentiation by
• Customer service
• Software
• UI
• camera
Fast track
Differentiation by
• Style
Examples

17. Michael Porter
“An industry’s profit
potential is largely
determined by the
intensity of
competitive rivalry
within that industry”