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Which of Porter's competitive strategies is the company using?

2007-02-22 06:05:57 · 4 answers · asked by dharmanathan s 1 in Business & Finance Corporations

4 answers

1. Cost Leadership - NOT USED BY STARBUCKS
In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.

2. Differentiation - STARBUCKS IS USING (I beileve they offer a premium experience, the overpriced coffee beverage, for a small price. Anyone can afford $5. People get to have a premium expereince for $5 which costs less than a movie)
In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price.

3. Focus - NOT USED BY STARBUCKS
The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

The focus strategy has two variants.

(a) In cost focus a firm seeks a cost advantage in its target segment, while in (b) differentiation focus a firm seeks differentiation in its target segment. Both variants of the focus strategy rest on differences between a focuser's target segment and other segments in the industry. The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation focus exploits the special needs of buyers in certain segments.

2007-02-22 06:13:14 · answer #1 · answered by msbedouin 4 · 0 0

Individuality and exclusiveness in business aspects

2007-02-22 06:09:32 · answer #2 · answered by cabridog 4 · 0 0

to get us all wacked out on coffee.

2007-02-22 06:14:25 · answer #3 · answered by Bob N 4 · 0 0

what?

2007-02-22 06:10:25 · answer #4 · answered by Chesh » 5 · 0 0

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