January 3, 2024
Competitive strategy refers to the long-term plan of a particular company to gain a competitive advantage over its rivals in the industry. It is fundamentally a value-creating strategy that seeks to position a firm’s products and services in a competitive business environment. It is strongly dependent on the superior organizational capabilities of a company to place its products and services so that those who wish to acquire them can afford it/them at the best price(s). This strategy provides a solid foundation that prevents market share and profits erosion by competitors. Critical aspects of competitive strategy include:
Cost Leadership: This strategy involves becoming the lowest-cost producer in the industry.
Differentiation: Differentiation strategy focuses on developing unique products or services that offer value that competitors do not provide. It can involve superior quality, advanced technology, unique features, or high levels of customer service.
Focus Strategy: Focus strategies concentrate on a specific market niche. Companies using this strategy target specific groups of consumers, a specific geographic market, or a particular product segment.
Innovation Strategy: Here, the focus is on developing new products or services and bringing them to market or improving the existing product line or processes. And to innovate frequently and price attractively.
Operational Effectiveness: While not a strategy, operational effectiveness means performing similar activities better than rivals.
Customer-Oriented Strategy: This approach focuses on creating high customer loyalty through superior customer service and relationship management and focusing on customer needs and preferences.
What is Competitive Strategy?
Competitive strategy refers to the long-term plan of a particular company to gain a competitive advantage over its rivals in the industry. It is fundamentally a value-creating strategy that seeks to position a firm’s products and services in a competitive business environment. It is strongly dependent on the superior organizational capabilities of a company to place its products and services so that those who wish to acquire them can afford it/them at the best price(s). This strategy provides a solid foundation that prevents market share and profits erosion by competitors. Critical aspects of competitive strategy include:
Cost Leadership: This strategy involves becoming the lowest-cost producer in the industry.
Differentiation: Differentiation strategy focuses on developing unique products or services that offer value that competitors do not provide. It can involve superior quality, advanced technology, unique features, or high levels of customer service.
Focus Strategy: Focus strategies concentrate on a specific market niche. Companies using this strategy target specific groups of consumers, a specific geographic market, or a particular product segment.
Innovation Strategy: Here, the focus is on developing new products or services and bringing them to market or improving the existing product line or processes. And to innovate frequently and price attractively.
Operational Effectiveness: While not a strategy, operational effectiveness means performing similar activities better than rivals.
Customer-Oriented Strategy: This approach focuses on creating high customer loyalty through superior customer service and relationship management and focusing on customer needs and preferences.
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