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Competitive Strategies
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Competitive Strategy
Consists of a company’s market initiatives
and business approaches to
 Attract and please customers
 Withstand competitive pressures
 Strengthen market position
Includes offensive and defensive moves to
 Counter actions of key rivals
 Shift resources to improve long-term
market position
 Respond to prevailing market conditions

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Objectives of Competitive
Strategy
Build a competitive advantage
Gain loyal customers
Out perform rivals, ethically and
honorably
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Types of Competitive Strategy:
Porter’s generic strategies
Market Scope
 Broad or Narrow
Competitive advantage
 Low cost or differentiated
Integrated differentiated / low cost


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Low-Cost Leadership

Focus on being low-cost relative to rivals

Low overall costs -- not just low
manufacturing or production costs.

Need to control and bypass Costs

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Differentiation Strategies
The objective

For success

How to sustain

Achieving Advantage

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Best Cost Provider Strategies



Emphasis on low-cost and differentiation

The objective

Competitive Strength
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Focus / Niche Strategies
Concentrate on a narrow piece of the
market

The objective

Two Approaches
 Low Cost
 Differentiation

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Types of growth strategies:
Miles and Snow typology

Prospector
 Seeks innovation
 Survey dynamic environment and
develops new products
 Competitors are uncertain about
prospector’s future decisions and
actions
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Types of growth strategies:
Miles and Snow typology

Defender
 Searches for market stability
 Limited product line
 Seeks to defend position
 Prevents others from entering its turf
 Can create and maintain niches
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Types of growth strategies:
Miles and Snow typology

Analyzer
 Strategy of analysis and imitation
 Copies promising new activities
Reactor
 Lacks a strategic plan
 Reacts to environmental changes
 Makes adjustments when forced to
 Unable to respond quickly to changes



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Additional Strategic Actions
Cooperative
Merger & Acquisition
Vertical Integration
Unbundling/Outsourcing
Offensive Strategies
Defensive Strategies
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Cooperative Strategies
Strategic Alliances or Collaborative
Partnerships

Used to
 Complement their own strategic
initiatives
 Strengthen competitiveness
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Merger - Combination and pooling of
equals, with newly created firm often
taking on a new name

Acquisition - One firm, the acquirer,
purchases and absorbs operations of
another, the acquired
Merger and Acquisition
Strategies
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Vertical Integration Strategies
Vertical integration
 Backward
 Forward

Amount of integration
 Full
 Partial
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Unbundling and Outsourcing
Strategies
De-Integration or unbundling
involves
 Narrowing the scope of the firm’s
operations
 Focusing on performing certain “core”
value chain activities
 Relying on outsiders to perform the
remaining value chain activities
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Using the Internet
Disseminate Product Information
Minor Distribution Channel
Brick-and-Click Strategies
Online Enterprises
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Offensive and Defensive
Strategies
*Offensive Strategies are
Used to build new or stronger market
position and/or create competitive
advantage
*Defensive Strategies are
Used to protect competitive advantage
(rarely are they the basis for creating
advantage)
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Offensive Strategies: Options
1. Initiatives to match or exceed competitor
strengths
2. Initiatives to capitalize on competitor
weaknesses
3. Simultaneous initiatives on many fronts
4. End-run offensives
5. Guerrilla warfare tactics
6. Preemptive strikes
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Offensive Strategies:
Choosing Who to Attack
Four types of firms can be the target of a
fresh offensive
 Market leaders
 Runner-up firms
 Struggling rivals on verge
of going under
 Small local or regional
firms not doing a good job
for their customers

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Defensive Strategies
Objectives

Approaches
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Timing and
Competitive Advantage
First Mover

Fast Follower

Late Mover