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4-1.1 Generic Business Strategies - Coggle Diagram
4-1.1 Generic Business Strategies
competitive advantages
differentiation advantage
Emphasizes value creation for customers
the three keys to selling consumer products are differentiation, differentiation, differentiation.
dope out what kinds of things might drive customer value
Ex.product features(phone market)
service(hotels), customization (Starbucks)
work out how to use resources, capabilities of the firm system of activities to create that value.
cost leadership
Put emphasis on controlling costs in order to generate economic value added and profits
ultimate goal is to reduce the expense of producing the company's product or service.
influencing factors
Ex. managerial inefficiency (bureaucracy)
A key idea behind these cost drivers exercise is to study the business and prioritize.
Step1： Where are most of the cost being incurred
Step2： try to reduce these costs
Ex. Walmart
Cost & Value in different situation
How exactly a company can produce a cost or differentiation advantage over its competitors?
(1) Need to understand what drives cost or customer value in a particular business
(2) Figure out how the firm's internal capabilities, resources or activity systems, that is its value chain or value network can be modified, enhanced, and applied to these cost or value drivers.
Four possible generic strategies
