WhIcH oNe tO emPLoy? - 5 geNerIC cOmpetitive StraTegies

08102013. Job interview session, it really makes me feel nervous when thinking about it. I could not imagine how I would react, do, think and so on if I’m in that session. Miss Ummi has shared with all of us about one of job interview session. Among the 300++ applications, only 7 out of them was accepted. It’s so scary. The main reason why other than 7 people was not accepted because of English language. If I’m in that job interview session, which one I will be placed? I don’t know what to say but deep inside my heart, I really want to be placed among the accepted one even though I can’t with my English communication skills right now. Hopefully, I’ll be placed among the accepted one, someday! Ameennn, In syaa Allah. 

For this week, we have learned about “the five generic competitive strategies: which one to employ?” so, did you know about it? I’m sure some of you know about it. Knowing about all this five strategies for the company is important as it give effect for company in making decision to choose the most suitable strategy for their company. In other words, deciding which generic strategy to employ is the most important strategic commitment a company makes because it tends to drive the rest of the strategic actions a company decides to undertake and it sets the whole tone for the pursuit of a competitive advantage over rivals. The five generic competitive strategies are:

1.       Low-cost provider strategy:

-Striving to achieve lower overall costs than rivals and appealing to a broad spectrum of customers, usually by underpricing rivals.

-approaches: pursue cost-savings that are difficult to imitate and avoid reducing product quality to unacceptable levels.

-eg: mydin, mcdonald’s, dell, air asia

2.     Broad differentiation strategy:

-seeking to differentiate the company’s product offering from rivals in ways that will appeal to a broad spectrum of buyers.

-approaches: (a) carefully study buyer needs and behaviors, values and willingness to pay for a unique product or service, (b) incorporate features that both appeal to buyers and create a sustainably distinctive product offering, (c) use higher prices to recoup differentiation costs.

-eg: apple, sony, rolex, fedex, louis vuitton, Harley-davidson

3.    Best-cost provider strategy:

-giving customers more value for their money by incorporating good-to-excellent product attributes at a lower cost than rivals; the target is to have the lowest (best) cost and prices compared to rivals offering products with comparable attributes.

Eg: Toyota, microsoft

4.     Focused low-cost strategy:

-concentrating on a narrow buyer segment and outcompeting rivals by having lower costs than rivals and thus being able to serve niche members at a lower price.

5.     Focused differentiation strategy:

-concentrating on a narrow buyer segment and outcompeting rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals’ products.

-eg: GAP, Porsche, Ferrari

In choosing the right generic strategy, a company has to spend time and effort as this will support all other strategic options. Michael Porter has specifically warned against any companies who try to employ more than one strategy option as every strategy appeals to different types of people and requires radically different approaches. Any company that are try to employ multiple strategies, will typically render a company without any clear strategic advantage and in poor strategic position. That’s all from me. PEAce No War!!!

  

“Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value.”        (Michael E. Porter)