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10-12-09 - If price rises faster be a cost leader If cost...

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10/12/2009 189 Midterm 1 - Michael porter 5 model - Resource analysis (Nucor, Honda) Creating a system that cannot be copied. Generic – copy Two strategies - Costs Leadership - Bringing costs down to attach customers - Differentiation – providing a different market needs Monopoly - If you have different product Low profit - If you are producing same product and have same cost you cannot make money High Profit - If you have many products for different market and have low costs Moderate Profit – If you have many products and have many competitors Being a cost leader or differentiate?
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Unformatted text preview: If price rises faster be a cost leader If cost rises faster differentiate Costs rise faster than price with product variety (Slide 24) Cost leadership is high when the number of product is low Prices rise faster than cost with product variety (Slide 25) Differentiate when the price increase faster when number of products increase You do not want to be in the middle because you cannot make profit With competition – your cost is going to go up and your prices go down because the costumers have a choice....
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