Porters' Generic Strategies

Question 1

Define Differentiation

Answer 1

Add unique features that will increase perceived value (V) in the minds of consumers, so that will pay higher price

Question 2

Drivers of Differentiation (ECC)

Answer 2

Enhancing product features,
Customer service,
Complements

Question 3

Risks of Differentiation (WCU)

Answer 3

Wrong focus, should be on lowering cost instead of differentiating in eyes of consumers,
Cost increased, value stagnate,
Uniqueness not captured

Question 4

Define Cost leadership

Answer 4

Reduce firm’s costs below competitors while offering adequate value - optimises all value chain activities to achieve low cost position

Question 5

Drivers of Cost Leadership (CELE)

Answer 5

Cost of input factors,
Economies of scale,
Learning curve effect
Experience curve