Session 9 - differentiation Flashcards
What is competitive advantage
A way that a business can make its products appear superior to its competition
How is competitive achieved
Cost advantage, differentiation advantage (Porter)
What is cost advantage (Porter)
Skilled workforce and efficient operations to provide low cost value
What is differentiation advantage (Porter)
Deliver benefits that exceed those of competing products
What are Porters 4 generic strategist achieve competitive advantage
Cost leadership, differentiation leadership, cost focus, differentiation focus
What is Cost leadership as one of Porters genetic strategies
Making products at the lowest cost, aimed at mass market
What are methods used to achieve cost leadership as one of Porters generic strategies
Outsourcing, lean management, low cost products
What is differentiation leadership as one of Porters generic strategies
Product or service is unique (USP adds value), aimed at mass market
What is cost focus as one of Porters generic strategies
Focused on cost minimisation (not price), aimed at niche market
What are methods used to achieve cost focus as one of Porters generic strategies
Manufacturing and production at low cost
What is differentiation focus as one of Porters generic strategies
Attempting to outperform rivals by offering a product perceived by consumers to be superior. Aimed at niche market
What are some methods used to differentiate a product
Added value, USP, price, quality, convenience, branding etc
Define added value
Difference between price charged to the customer and the cost required to make the good
What are ways businesses can add value
Design - new tech/features to differentiate
Production - achieve quality and efficiency
Marketing - create an image to make the product more desirable
Process - e.g slicing or cooking
Additional ingredients - e.g ingredients
Convenience - e.g in supermarket
Packaging - e.g carrot in plastic package
