Porters Generic strategy Flashcards
What does Porters strategy compete on?
Price, perceived value or customer needs
Strategy for perceived uniqueness in mass market
differentiation
Methods of differentiation
quality
customer service
brand personality
speed and efficiency
USP
Pros of differentiation
Stand out - demand
Unique brand image
USP- Higher prices
Cons of differentiation
Other businesses copy strategy
Strategy for low cost to a mass market
Cost leadership
What is cost leadership
Being the lowest cost operator for an advantage
Methods of Cost leadership
Keep operation costs low
Economies of scale thru growth
Technology - automation
Cheap raw materials
High productivity
Control supply of a product
Pros of cost leadership
High profit margins as cost
Low price - gain market share
High productivity
Wide distribution
Cons of cost leadership
Not every business can do this because cannot directly compete on cost
Strategy of Differentiation/Cost leadership with a niche market
Segmentation strategy
Methods of segmentation
Geographic
Specialist service
Demographic characteristics
Pros of Segmentation
Easy to target as marketing can be focused
Meet needs more effectively
High selling price
Cons of Segmentation
Loyalty to maintain sales
