Competitive Advantage For A Company 's Future Survival Essay

896 Words May 27th, 2016 4 Pages
In today’s market, competition plays an important role for companies. The battle of competition forces companies to draw attention and create competitive advantage. The ultimate goal for a company’s future survival or success is to meet customer demands while keeping the costs down. Michael Porter, the write of “competitive Advantage: Creating and Sustaining Superior Performance”, defines three cost leadership approaches as generic strategies (Porter 's Generic Strategies, 2015). According to Porter, generic strategies include Cost Leadership, Differentiation, and Focus. He also subdivided the Focus strategy into two parts of Cost Focus and Differentiation focus. Cost leadership strategy refers to the lowest cost of operation and is driven by organization efficiency, technology, and experience. Companies with lower costs, due to lower sales price, may have competitive advantage, but some may decide to charge higher to target specific markets (Porter, 1984). An organization with lowest cost in the market, but not offering lowest-priced products will enjoy higher profitability than average, but such approach may jeopardize company’s competitiveness in long term. On the other hand, an organization that concentrates on the Low Tech segment and follows Niche Cost Leader strategy can probably lead the market. That is due to the low cost and below the average pricing.

Low Technology Strengths and Weaknesses?
Low Technology Cost Leader is used in businesses that…

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