Business Strategy Game Study Aid – 27 Questions and Answers

Company's competitive strategy Deals exclusively with the specifics of management's game plan for competing successfully. (Please customers, strengthen market position, achieve competitive advantage) Difference among competitive strategies 1) Company's target market is broad or narrow 2) Pursuing a competitive advantage linked to low costs or product differentiation 5 generic competitive strategies 1) Low-cost provider 2) A broad differentiation strategy 3) Focused low-cost strategy 4) Focused differentiation strategy 5) Best-cost provider Low-cost provider strategy Striving to achieve lower overall costs than rivals & appealing to a broad spectrum of customers (under pricing rivals) Broad differentiation strategy Seeking to differentiate the company's products/service offerings from rivals' in ways that it will appeal to a broad spectrum of buyers Focused low-cost strategy Concentrating on a narrow buyer segment and outcompeting rivals by serving niche members at a lower cost than rivals 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 the rival products Best-cost provider strategy Giving customers more value for the money by incorporating good-to-excellent product attributes at a lower cost than rivals Low-cost provider's basis for competitive advantage is lower overall costs than competitors Successful low-cost leaders (have lowest industry costs) are good at driving costs out of their business and still provide product/service that buyers find acceptable To achieve a low cost advantage: 1) Doing a better job than rivals in performing value chain activities more cost effectively