Comparison between the generic strategies Distinguishing features of each generic strategy Table 4 Distinguishing features of the different generic strategies Parameter Cost leadership Differentiation Focus: low cost differentiation Best-cost strategy strategy strategy Strategic target A broad cross-section A broad cross-section A narrow market niche A narrow market niche Value-conscious buyers of the market of the market in which buyer needs in which buyer needs and preferences are and preferences are distinctively different distinctively different Basis of competitive Lower overall costs Ability to buyers overall costs that Attributes that appeal Ability to give advantage than those of something attractively rivals in serving niche specifically to niche customers more value competitors different from that of buyers buyers for money its competitors Product line A good basic product Many product Features and attributes Features and attributes Items with appealing with few frills variations; wide tailored to the tastes tailored to the tastes attributes; assorted (acceptable quality and selection; emphasis of and requirements of and requirements of upscale features limited selection) differentiating features niche buyers niche buyers Production emphasis A continuous search for Differentiating features A continuous search for Custom-made products Produce upscale cost reduction without that buyers are willing cost reduction that match the tastes features and appealing sacrificing acceptable to pay for; product incorporating features and requirements of attributes at lower cost quality and essential superiority and attributes matched niche buyers than rivals features to niche buyer preferences Marketing emphasis Trying to make a virtue Flaunting Communicating Communicating how Flaunt delivery of best out of product features differentiation attractive features of a the product offering value; deliver that lead to low cost features; charging a budget-priced offering does the best job of comparable features at premium to cover that fits niche buyers’ meeting niche buyers’ a lower price than rivals the extra costs of expectations expectations or match rivals’ prices differentiating features
Comparison between the generic strategies Distinguishing features of each generic strategy Table 4 Distinguishing features of the different generic strategies Parameter Cost leadership strategy Differentiation strategy Focus: low cost differentiation Best-cost strategy Strategic target A broad cross-section of the market A broad cross-section of the market A narrow market niche in which buyer needs and preferences are distinctively different A narrow market niche in which buyer needs and preferences are distinctively different Value-conscious buyers Basis of competitive advantage Lower overall costs than those of competitors Ability to buyers something attractively different from that of its competitors overall costs that rivals in serving niche buyers Attributes that appeal specifically to niche buyers Ability to give customers more value for money Product line A good basic product with few frills (acceptable quality and limited selection) Many product variations; wide selection; emphasis of differentiating features Features and attributes tailored to the tastes and requirements of niche buyers Features and attributes tailored to the tastes and requirements of niche buyers Items with appealing attributes; assorted upscale features Production emphasis A continuous search for cost reduction without sacrificing acceptable quality and essential features Differentiating features that buyers are willing to pay for; product superiority A continuous search for cost reduction incorporating features and attributes matched to niche buyer preferences Custom-made products that match the tastes and requirements of niche buyers Produce upscale features and appealing attributes at lower cost than rivals Marketing emphasis Trying to make a virtue out of product features that lead to low cost Flaunting differentiation features; charging a premium to cover the extra costs of differentiating features Communicating attractive features of a budget-priced offering that fits niche buyers’ expectations Communicating how the product offering does the best job of meeting niche buyers’ expectations Flaunt delivery of best value; deliver comparable features at a lower price than rivals or match rivals’ prices
MNG3701-001_2011_4_e_study_notes_quantum.docx