The most serious challenge that an organization faces on a day-to-day basis is from the competition. One of the messages we get from Chapter 6 is that if an organization is to survive it cannot just react to the competition. The organization must develop a proactive strategic program based on its core competencies. This can be summed up by the expression "A good offense is a good defense".
Michael Porter, in his Generic Competitive Strategies, presented three strategies:
1. Cost leadership: (allows low pricing)
2. Differentiation: (unique differences in products/services)
3. Focus: ("niche" marketing)
Discuss your opinions with regards to the type of competitive strategy you would prefer if you were running a company, and wanted to establish a long term competitive edge over your competitors.
Why do you think the strategy you chose would be the most effective? Explain whether your selection is based on the nature of the company or industy or other factors.
Back up your opinion. Give examples from your own experience/knowledge, or examples of organizations from business periodicals.
For example, WalMart has established itself as a low price leader; Intel differentiates itself in the microchip business on the basis of reliability and quality ("Intel Inside"), and Tiffanys caters to the rich (niche).
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Considering that I am framing strategy for Nestle Company. As a part of Nestle, differentiation competitive strategy would be preferred to establish the long-term competitive edge over the competitors in food processing sector. Differentiation is not only about creating uniqueness, but also related with the understanding about customers needs and wants and fulfillment of them effectively (About Nestle, 2012). So, through considering this differentiation strategy, the firm can focus over the area through which it can differentiate its products and services incorporating quality. To create unique competency, this strategy would help the firm positively through providing broad market scope. It is because through considering this strategy, Nestle can include new product ...
Competitive strategies questions are examined. Cost leadership, differentiation and focus is examined.