Professional Documents
Culture Documents
OVERVIEW
Introduction to all five
Strategies
Competitive Advantages
How to achieve?
Key success Advantages and Pitfalls Examples
The Agenda
Overall Low Cost Provider
Strategy
Differentiation Strategy
Best Cost Provider Strategy Focused or Niche Low Cost
Strategy
Focused or Niche
Differentiation Strategy
Economies of Scale
Achieving low direct and indirect costs Control over supply/procurement chain to ensure low costs Location Technological up gradation
Key to success
Finding ways to differentiate to create value for customers that are not easily copied Not spending more to differentiate than the price premium that can be charged
Make an upscale product at a lower cost Striving to give customers more value for the money by combining an emphasis on low cost with an emphasis on upscale differentiation Combines low-cost and differentiation
The objective is to create superior value by meeting or beating customer expectation on product attributes and beating their price expectations
Match close competitors on key product attributes and beat them on cost
Expertise at incorporating upscale product attributes at a lower cost than competitors Contain costs by providing customers a better product
Best-Cost Provider
Competitive Advantage Competitive advantage comes from matching close competitors on key product attributes and beating them on price
Most successful best-cost providers have skills to simultaneously manage costs down and product quality up Best-cost provider can often beat an overall low-cost strategy and a broad differentiation strategy where customer diversity makes product differentiation the norm
Many customers are price and value sensitive
Best-Cost Provider
Marketing Emphasis Tout delivery of best value Either deliver comparable features at a lower price than rivals or match rivals on prices and provide better features Keys to Sustain Unique expertise in simultaneously managing costs down while incorporating upscale features and attributes
On-line and telephone sales and support can also be attributed to Dell's superb direct model. By using this method Dell has managed to help keep internal costs low. Dell's cost leadership strategy has also allowed them to respond to market indicators favorably. Supply chain management is another key competitive advantage that dell holds. Suppliers are required to have hubs near Dell's factories and manufacturing plants. Dell has reduced its turn around time to less than 5 days.
Dell d410 DELL 6400 LAPTOP Dell xps m2010 DELL Latitude D410 Dell D620 laptop DELL LATITUDE 100L
Targets upscale buyers who desire products and services with world class attributes.
Choose a niche were customers have a distinctive preference, unique needs or special requirements
Develop a unique ability to serve the needs of a niche target market
Companies name will circulate amongst clients more quickly Good growth potential High profit margin Organization has the resources to effectively serve the niche Organization can defend itself against challengers through a superior ability to serve the niche Less competitors are focusing on the niche
Competitors dont have the matching capabilities to meet specialized needs of the niche Organization competencies and capabilities act as a barrier for potential entrants Organizations competitive advantage provides an obstacle for substitutes
Organizations ability to meet the needs of customers in the niche can reduce the bargaining power of large niche buyers
It may be fairly easy for a broad market cost leader to adapt its product in order to compete directly. Niche customers preferences may move toward the product attributes desired by a larger market segment Limited profitability if many competitors enter the niche
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PRESENTED BY Saurabh Chakravarty Vikash Kumar Jha Proheli Basak Ayan Bhattacharya Gargi Mitra