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G3-[FBS4]Determine Competitive Position (Niche Strategy (A smaller,…
G3-[FBS4]Determine Competitive Position
Introduction
Generic competitive position
More than one profitable or rent-producing position in a firm
How to analyze
Strategic map
No fixed criteria
Capabilities analysis
Five forces analysis
Classify into four ideal types by two elements
Competitive scope within industry
Sources of competitive advantage
The Purpose
Understand the dynamics of an industry
Realize the positioning of a firm relative to its competition
Cost Leadership Strategy
Keeping costs lower
Having a lower marginal cost
Low-cost inputs/offshoring
Cost-cutting
Focus on price, not on R&D or advertising
Advanced operations and continuous improvement
Focused Low-Cost Strategy
Lower Competitive Scope
About firms keeping their cost lower than other competitors', but it's in a narrower segment of the market.
Deter rivalry by dividing markets
Capture narrow economics of scale
Niche Strategy
A smaller, premium segment of market
Brand loyalty
is important
Compete based on UNIQUENESS
Example:Porsche
Narrower scope of offering & strategic
Strategic Map
How to map competitive positions
1.Profile and define the market or industry
2.Take two or three criteria or factors
3.Identify major competitors and how they're positioned
Purpose
- Why do firms map competitive positions
To understand a firm's position(s) and evaluate competitors
Differentiation
higher willingness-to-pay
unique features
high quality
prestige
BMW
Intel
Target
Goldman
Apple
Approaches
Brand
create a great image
Hi G3, good job!