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Competitive strategy and strategic direction for THE organizations. -…
Competitive strategy and strategic direction for THE organizations.
Competitive Strategy
Is concerned with the bases on which a strategic business unit might achieve competitive advantage in its chosen market or markets
Frame condition:
Those conditions operating in the organization's commercial environment that frame strategic decision making for a particular organization
Representing the major changes or trends occurring in an industry or parts of it.
Michael Porter's generic strategies
:
Three main alternatives
Differentiation
Cost leadership
Offering a superior level of service
Having access to superior distribution channels
Creating a strong brand name through design, innovation, advertising, loyalty programmes and public relations
Focus
Focusing on a particular group of buyers
Specializing in particular geographic destinations
Criticism for Porter's generic strategy framework
Cost leadership does not, in or of itself, sell products
Differentiation strategies can be used to increase sale volumes rather than to charge a minimum price
Price can sometimes be used to differentiate
A 'generic' strategy cannot give competitive advantage
Core competencies, distinctive capability and competitive advantage
Customer perceptions
Uniqueness
Continuos improvement
Collaboration
Organizational Knowledge
Strategic decision
Growth—Igor Ansoff's product-market framework
Market penetration
Market development
Product development
Diversification
Organizations' Strategic Business Unit
Stability strategies
To maintain the activities of the SBU
Retrenchment strategies
To reduce the activities of the SBU