![]() ![]() Lower Cost Strategy: When a firm competes on the basis of lower charged prices for the goods and services in the industry, it is called to be following a “ lower cost or cost leadership strategy”. Based on the above two factors which are size of the target market and the approach to serve it, Porter proposed three generic competitive strategies which can be opt by any organization. Competitive strategies play a significant role in determining the position of a company in its industry. whether it’s going to compete on some distinctive factor by providing goods and services in a unique way or by providing similar products and services at lower prices as compared to their competitors. Secondly, the organization has to decide that in what way it would be competing in the chosen market i.e. whether organization is going to serve a broad market or it is planning to serve into a small niche only, that is, it defines competitive scope for the business organization. Firstly, the scope of the market in which that organization is going to serve i.e. Porter implied that for any business organization there are two most important things to decide. Porter has done a lot of work to develop literary work on the key concepts of Strategic Management. it simply defines a competitive strategy.īasically, there are three general competitive strategies proposed by Michael Porter, and famously known as “ Porter’s Generic Competitive Strategies”. For that purpose a business has to adopt such a business strategy which will lead to a sustainable competitive advantage, because a business strategy directs a business in dealing with its competition within the business or industry, in which it serves, i.e. Because all business firms have resources, capabilities and core competencies, if these are utilized effectively, competitive advantage is gained but the crucial fact is the sustainability of that edge over a long time. It’s not a real issue that a company is having competitive advantage over the other firms, but the main thing is to ‘ sustain’ that competitive edge over a long period of time. Competitive advantage of a firm can come from its core competencies, a business’ capability to do a thing in a different manner from others, organizational resources, firm’s plus points like an organization holds something very unique which others in that industry don’t have. a business’ distinctive point, which is not easily imitate able by the firms in competition. Strategies, if outlined in an optimal manner can take full advantage of a company’s competitive advantage, where competitive advantage refers to a company’s ability to stand out from its competitors in the business, i.e. ![]() Strategies are the game plans stating that how to achieve an organization’s goals. IKEA: Making a success of being “ Stuck in the middle”?Įach organization in the world follows some strategies to carry out its business activities in an appropriate manner. ![]()
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