choosing how to compete Flashcards
what are the two main strategies for learning how to compete
low cost and differentiation
what is the advantages of a low cost strategy
affordable during economic troubles
attracts wide range of customers
exploits economies of scale
what is the disadvantages of a low cost strategy
easily copied
low profit margins
quality may suffer
what is the advantages of differentiation strategy
may charge higher prices due to USP
can use patents to protect unique products
higher quality will attract customers
what is the disadvantages of differentiation
expensive due to r&d and marketing
risky that revenue won’t cover costs
smaller target market
what is porters generic strategies
low cost or differentiation
why has porters generic strategys been criticised
its too narrow and simplistic as many businesses offer both low cost and differentiation
