Chapter 5 Lecture Note The Five Generic Competitive Strategies Chapter Summary Chapter Five describes the five basic competitive strategy options – which of the five to employ is a company’s first and foremost choice in crafting overall strategy and beginning its quest for competitive advantage. Lecture Outline I. Introduction 1. By competitive strategywe mean the specifics of management’s game plan for competing successfully – how it plans to position the company in the marketplace, its specific efforts to please customers, and improve its competitive strength, and the type of competitive advantage it wants to establish. Core Concept A competitive strategyconcerns the specifics of management’s game plan for competing success-fully and achieving a competitive advantage over rivals. 2. A company achieves competitive advantage whenever it has some type of edge over rivals in attracting buyers and coping with competitive forces. 3. There are many routes to competitive advantage, but they all involve giving buyers what they perceive as superior value. 4. Delivering superior value – whatever form it takes – nearly always requires performing value chain activities differently than rivals and building competencies and resource capabilities that are not readily matched. II. The Five Generic Competitive Strategies 1.There are countless variations in the competitive strategies that companies employ, mainly because each company’s strategic approach entails custom-designed actions to fit its own circumstances and industry environment. 2. The biggest and most important differences among competitive strategies boil down to: a. Whether a company’s market target is broad or narrow b. Whether the company is pursuing a competitive advantage linked to low costs or product differentiation
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