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[G5] Determining Competitive Position (Generic Competitive Positions…
[G5] Determining Competitive Position
Strategy Maps
Function
combine a couple of different sets of ideas
capabilities analysis
competitor analysis
Why can't the map tell everything in a strategic analysis?
It's in wide use in consulting
It's a generic tool
visually map the different competitors in an industry
Purpose
competitive positioning
Which Position is Best?
Two Question to ask ourselves
Firm Capabilities
How may our capabilities help estabilish and defend a position?
Industry Structure
Does the structure shelter certain position?
Four Ways to Analyze
How contested is a position
Blue Ocean Strategy
New market and position
Red Ocean Strategy
Existing market and position
Can we estabilish this competitive position
Can we execute it?
Can we do it in a unique way?
What favorable strategy opportunities exist?
Which position is better than others
Can we defend this position once estabilished?
How sustainable it will be?
Is it difficult to others to imatate?
Does others likely to evlove?
The Strategy Challenges
Opportunities
Value
Capabilities
Valuable Competitive Position
Module Lessons
industries often have more than one profitable position
profitable or rent producing positions rely on
superior capabilities
favorable industry structure
positions like markets are defined
by the ways of delivering on those needs
by the market needs
firms can combine multiple positions
Generic Competitive Positions
Cost Leadership
Features
Lower cost than other competitors
Broadly acceptable products
Approaches
Engage in cost-cutting
Build market share to gain EOS
Use low-cost inputs,offsharing
Minimize overhead like R&D and ad
State of-the-art operations
Differentiation
Features
based on higher willingness to pay
Better service,quality or prestige
Approaches
Creating brands through ad
Develop innovative capability
Invest in HR,R&D
valuable competitive position
opportunities
capabilities
values
Generic Competitive Positions
horizontal
source of the firm's competitive advantage
cost
uniqueness
vertical
competitive scope in industry
narrow
broad
Cost Leadership (成本領先)
Low cost structure
(high capital investment represents high entry barriers)
Limited increase in profits , increase market share
Focused low-cost (成本聚焦)
example , profit 2 cost4
Differentiation (差異化)
Bargaining Power of Customers is low
Less substitution
example , profit 2 cost 6
Niche (利基)
Specialized Operation
Selected a small area of products or services