My Fifth
CLAss ;)
Assalamualaikum
and hye everyone ;)
What you all doing right now?? Hope
everyone always be happy for whatever u are doing and everything because of
HIM. Remember to always ‘renew’ our intention. J As human
being, sometime we don’t realize that our intention because of something else. Sometime
we are forgot everything just for HIM, ONLY HIM.
y
Emmm, OKAYHHH !!! I’M Just continue what
I’m going to tell all of you about my INTERESTING CLASS with MISS UMMI J..
hikhikhik. For this week, i learned in chapter 5,
THE FIVE GENERIC COMPETITIVE STRATEGIES. As good companies, they
must know how to deal with the competitive strategy because a company’s
competitive strategy deals exclusively with the specifics of management’s game
plan for competing successfully. Its specific efforts to please customers,
strengthen its market position, counter the maneuvers of rivals, respond to
shifting market conditions, and achieve a particular kind of competitive
advantage.
The five generic competitive strategies are low-cost provider strategy,
a broad differentiation strategy, a focused low-cost strategy, a focused
differentiation strategy, and a best-cost provider strategy. Then, the
best-cost provider strategy included the four items of competitive strategies.
The one of the five generic competitive
strategies is the LOW-COST PROVIDER
STRATEGIES. But what is the objective
?? The low-cost provider
strategies are striving to achieve lower
overall costs than rivals on comparable products that attract a broad spectrum
of buyers. A company achieves low-cost leadership when it becomes the
industry’s lower-cost provider rather than just being one of perhaps several
competitors with comparatively low costs. A company has two options
for translating a low-cost advantage over rivals into attractive profits
performance.
Firstly, to use the lower-cost edge to underprice competitors and
attract price-sensitive buyers in great enough numbers to increase total
profits. Secondly, to maintain the present price, be content with the present
market share, and use the lower–cost edge to earn a higher profit margin on
each unit sold, thereby raising the firm’s total profits and overall return on
investment.
Then, there are two major avenues
for achieving a Cos Advantage which are perform value chain attractive more
cost-effectively than rivals and revamp the firm’s overall value chain to
eliminate or bypass some cost-producing activities. The company should alert on
cost drivers that are the KEYS to Driving DOWN COMPANY COSTS which are economics of scale, learning and experience, capacity
utilization, supply chain efficiencies, input costs, production technology and
design, communication systems and information technology, bargaining power,
outsourcing or vertical integration, and incentive systems and culture.
BUT!!! The company must avoid a pitfall in pursuing a
Low-Cost Provider Strategy. There are three pitfalls to avoid such as getting
carried away with overly aggressive price cutting and ending up with lower,
rather than higher, profitability. A second big pitfall is relying on an
approach to reduce costs that can be easily copied by rivals. A third pitfall
is becoming too fixated on cost reduction.
Besides that, the other Best Cost
Strategy is BROAD DIFFERENTATION STRATEGIES. The essence of a broad
differentiation strategy is too offer unique product attributes that a wide range of
buyers find appealing and worth paying for. The example successful
differentiation are command a premium price for its product, increase unit
sales and gain buyer loyalty to its brand. Rememeber
!!! Company differentiation
strategies fail when buyers don’t value the brand’s uniqueness
sufficiently and/or when a company approach to differentiation is easily
matched by its rivals.
The most systematic approach that
managers can take is focusing on the UNIQUENESS DRIVERS that are the KEYS
to CREATING
a DIFFERENTATION ADVANTAGE. The examples of uniqueness drivers are
striving to create superior product features, design and performance, improving
customer service or adding additional services, pursuing production R&D
activities, striving for innovation and technological advances, pursuing
continuous quality improvement, increasing emphasis on marketing and
brand-building activities, seeking out high-quality inputs and emphasizing
human resources management activities that improve the skills,expertise, and
knowledge of company personnel.
In pursuing broad differentiation strategies,
there are also having a pitfalls and the company MUST AVOID ITS!!! Firstly, a
differentiation keyed to product or service attributes that are easily and
quickly copied is always doomed. A second pitfall is that the company’s attempt
at differentiation produces and unenthusiastic response on the part of buyers.
The third big pitfall is overspending on efforts to differentiation the
company’s product offering, thus eroding profitability.
Furthermore, FOCUSED
(OR MARKET NICHE) STRATEGIES. It defined by geographic uniqueness, by specialized requirements in
using the product, or by special product attributes that appeal only to niche
members. There are two strategies focused by market niche which are low cost strategy and
differentiation strategy.
A focused on low-cost strategy by aim
at securing a competitive advantage by serving buyers
in the target market niche at a lower cost and lower price than those of rival
competitors. The firm can lower costs significantly by limiting its
customer base to a well-defined buyer segment. It also keeping the costs of
value chain activities contained to a bare minimum and search for innovative
ways to bypass nonessential activities. Producers of private-label goods are
able to achieve low costs in product development, marketing, distribution, and
advertising by concentrating on making generic items imitative of name-brand
merchandise and selling directly to retail chains wanting a low-priced store
brand.
Secondly, a focused on
differentiation strategy. It keyed to offering products
or services designed to appeal to the unique preferences and needs of a narrow,
well-defined group of buyers. It depends on the existence of a buyer
segment that is looking for special product attributes or seller capabilities
and on a firm’s ability to stand apart from rivals competing in the same target
market niche.
But, as usual every strategy has a risk
included the low-cost and differentiation strategy. One of the risks is the
chance that competitors will find effective ways to match the focused firm’s
capabilities in serving the target niche. Secondly, the risk related to the
employing which is the potential and needs of niche members to shift over time
toward the product attributes desired by the majority of buyers.
Lastly, the main strategy is the BEST-COST
PROVIDER STRATEGIES. It stake out a middle ground between
pursuing a low-cost advantage and a differentiation advantage, and between
appealing to the broad market as a whole and a narrow market niche. The CORE CONCEPT is best-cost provider strategies are a HYBRID OF LOW-COST PROVIDER AND DIFFERENTIATION THAT AIM AT PROVIDING DESIRED QUALITY/FEATURES/PERFORMANCE/SERVICE
ATTRIBUTES WHILE BEATING RIVALS ON PRICE. It be very successful in market when product differentiation
is the norm and an attractively large number of value-conscious buyers can be
induced to purchase midrange products rather than cheap, basic products or
expensive top-of-the-line products.
I think I already
explained in a VERY LOOOONGGG sentences
. Uhuhuhu, hope you ALL understand my
explanation ;) see u all again ya^^
assalamualaikum…
