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Competitive Strategy, Sources of Cost Leadership - Coggle Diagram
Competitive Strategy
Porters Generic Strategies
Competitive Scope
(Broad / Narrow) vs.
Type of advantage
(Low Cost/ higher WTP)
Broad Differentiation
Seeking to differentiate the firm’s product or service from rivals’ in ways that will appeal to a
broad spectrum of buyers – “prestige of the masses” (Starbucks, BMW, Apple)
Focused Low Cost
Concentrating on a narrow buyer segment (or market niche) and outcompeting rivals by
having lower costs than rivals and thus being able to serve niche members at a lower price
Low Cost provider
achieve lower overall costs than rivals and appealing to a broad spectrum of
customers, usually by underpricing rivals (Walmart, IKEA)
Focused Differentiation
Concentrating on a narrow buyer segment and outcompeting rivals by offering customized
attributes that meet segment’s tastes and requirements better than rivals’ products
Walmart Case
Sources of Cost Leadership
• Input costs
• Product design
• Production techniques
• Economies of density
• Economies of scope
• Economies of scale
Experience curves