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Competitive Strategies
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Competitive Strategy
Consists of a companys market initiatives
and business approaches to
Attract and please customers
Withstand competitive pressures
Strengthen market position
Includes offensive and defensive moves to
Counter actions of key rivals
Shift resources to improve long-term
market position
Respond to prevailing market conditions

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Objectives of Competitive
Strategy
Build a competitive advantage
Gain loyal customers
Out perform rivals, ethically and
honorably
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Types of Competitive Strategy:
Porters generic strategies
Market Scope
Broad or Narrow
Competitive advantage
Low cost or differentiated
Integrated differentiated / low cost


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Low-Cost Leadership

Focus on being low-cost relative to rivals

Low overall costs -- not just low
manufacturing or production costs.

Need to control and bypass Costs

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Differentiation Strategies
The objective

For success

How to sustain

Achieving Advantage

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Best Cost Provider Strategies



Emphasis on low-cost and differentiation

The objective

Competitive Strength
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Focus / Niche Strategies
Concentrate on a narrow piece of the
market

The objective

Two Approaches
Low Cost
Differentiation

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Types of growth strategies:
Miles and Snow typology

Prospector
Seeks innovation
Survey dynamic environment and
develops new products
Competitors are uncertain about
prospectors future decisions and
actions
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Types of growth strategies:
Miles and Snow typology

Defender
Searches for market stability
Limited product line
Seeks to defend position
Prevents others from entering its turf
Can create and maintain niches
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Types of growth strategies:
Miles and Snow typology

Analyzer
Strategy of analysis and imitation
Copies promising new activities
Reactor
Lacks a strategic plan
Reacts to environmental changes
Makes adjustments when forced to
Unable to respond quickly to changes



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Additional Strategic Actions
Cooperative
Merger & Acquisition
Vertical Integration
Unbundling/Outsourcing
Offensive Strategies
Defensive Strategies
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Cooperative Strategies
Strategic Alliances or Collaborative
Partnerships

Used to
Complement their own strategic
initiatives
Strengthen competitiveness
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Merger - Combination and pooling of
equals, with newly created firm often
taking on a new name

Acquisition - One firm, the acquirer,
purchases and absorbs operations of
another, the acquired
Merger and Acquisition
Strategies
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Vertical Integration Strategies
Vertical integration
Backward
Forward

Amount of integration
Full
Partial
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Unbundling and Outsourcing
Strategies
De-Integration or unbundling
involves
Narrowing the scope of the firms
operations
Focusing on performing certain core
value chain activities
Relying on outsiders to perform the
remaining value chain activities
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Using the Internet
Disseminate Product Information
Minor Distribution Channel
Brick-and-Click Strategies
Online Enterprises
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Offensive and Defensive
Strategies
*Offensive Strategies are
Used to build new or stronger market
position and/or create competitive
advantage
*Defensive Strategies are
Used to protect competitive advantage
(rarely are they the basis for creating
advantage)
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Offensive Strategies: Options
1. Initiatives to match or exceed competitor
strengths
2. Initiatives to capitalize on competitor
weaknesses
3. Simultaneous initiatives on many fronts
4. End-run offensives
5. Guerrilla warfare tactics
6. Preemptive strikes
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Offensive Strategies:
Choosing Who to Attack
Four types of firms can be the target of a
fresh offensive
Market leaders
Runner-up firms
Struggling rivals on verge
of going under
Small local or regional
firms not doing a good job
for their customers

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Defensive Strategies
Objectives

Approaches
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Timing and
Competitive Advantage
First Mover

Fast Follower

Late Mover