Creating Competitive Advantage
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1. Discuss three ways in which a firm can create competitive advantage. Compare and contrast these methods for creating competitive advantage in today's competitive and global markets.
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This solution discusses three ways in which a firm can create competitive advantage. It also describes these methods for creating competitive advantage in today's competitive and global markets for comparisons.
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1. Discuss three ways in which a firm can create competitive advantage. Compare and contrast these methods for creating competitive advantage in today's competitive and global markets.
In his 1980 classic Competitive Strategy: Techniques for Analysing Industries and Competitors, Porter simplifies the scheme by reducing it down to the three best strategies. They are:
(1) cost leadership,
(2) differentiation, and
(3) market segmentation (or focus).
Market segmentation is narrow in scope while both cost leadership and differentiation are relatively broad in market scope. http://en.wikipedia.org/wiki/Porter_generic_strategies
A. Cost Leadership Strategy
This strategy emphasizes efficiency. By producing high volumes of standardized products, the firm hopes to take advantage of economies of scale and experience curve effects. The product is often a basic no-frills product that is produced at a relatively low cost and made available to a very ...
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