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26 Cards in this Set
- Front
- Back
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Three Generic Strategies |
-Overall Cost Leadership
- Differentiation - Focus |
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Overall Cost Leadership Attributes |
-Low cost position relative to a firm's peers
- Manage relationships throughout the entire value chain |
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Differentiation Attributes |
- Create products and/or services that are unique and valued - Non-price attributes for which customers will pay a premium - May be actual or perceived |
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Focus Strategy Attributes |
-Narrow product lines, buyer segments, or targeted geographic markets - Attain advantages through specialization and in-depth user knowledge |
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Interrelated tactics of OCL |
- Tight cost and overhead control - Avoidance of marginal customer accounts - Cost minimization in all activities in the firm's value chain |
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OCL Experience Curve |
- Refers to how business "learns" to lower costs as it gains experience with production processes - With experience, unit costs of production decline as output increases in most industries |
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Differentiation is based on: |
-Prestige or brand image - Technology - Quality - Features - Customer service - Dealer network |
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Differentiation and the Five Forces |
- High customer loyalty, high entry barriers - High margins, handled supplier power - High customer loyalty, low threat from substitutes |
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Focus Strategy Basis
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Based on the choice of a narrow competitive scope within an industry - Firm selects a segment or group of segments (niche) and tailors its strategy to serve them - Firm achieves competitive advantages by dedicating itself to these segments exclusively |
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Focus and the Five Forces |
- Creates barriers of either cost leadership or differentiation, or both. - Used to select niches that are least vulnerable to substitutes or where competitors are weakest |
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Sources of Competitive Advantage (Based on Core Values) |
- Efficiency - Innovation - Quality - Customer Service - Speed/Adaptability |
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Limitations of Generic Strategy |
- Static; do not take into account competitive dynamics - Not sustainable through ILC stages - Innovation is the fourth; dynamic |
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Generic Strategies |
Diff Diff Diff/ OCL OCL/Focus |
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Market Growth Rate |
Low Very Large Low to moderate Negative |
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Number of Segments |
Very Few Some Many Few |
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Intensity of Competition |
Low Increasing Very intense Changing |
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Emphasis on Product Design |
Very High High Low to Moderate Low |
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Emphasis on Process Design |
Low Low to moderate High Low |
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Major Functional Areas of Concern |
Research and development Sales and marketing Production General management and finance |
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Overall Objective |
Increase market awareness Create consumer demand Defend market share and extend product life cycles Consolidate, maintain, harvest or exit |
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Competitive Dynamics |
- First Mover Advantage - Size Advantage - Quality Advantage |
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Fast Cycle Markets |
---Technology-driven (Red Queen Effect) --- Innovation and Imitation --- Technology Diffusion --- Reverse Engineering |
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Miles and Snow: Defender |
Dynamic Strategy: Expand market share, market domination Competitive Advantage: Size related |
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Miles and Snow: Prospector |
D: First mover C: Innovation and speed related |
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Miles and Snow: Analyzer |
D: Fast Follower, Imitator C: Quality Related |
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Miles and Snow: Reactor |
D: Follower C: None |
