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. 

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       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…