A competitive strategy is an attribute that gives access to the organization to stay ahead of its competitors. These benefits can include an allowance to natural resources like highly skilled labour, high-grade ores, geographic location, low-cost power source, access to new technology and high entry barriers.
This is mostly a long term action which is a plan of business which is placed to achieve competitive benefit over competitor after evaluating its benefits, weakness, threats, opportunities in business and compares with you own.
What Are The Types Of Competitive Strategy?
According to Michael Porter who is a professor at Harvard showed a competitive strategy concept. So according to Michael, they are four times of competitive strategy which is fully implemented by the company globally. So a business should understand its core principles of competitive strategy which will help to take beet business decisions in the course of action.
This strategy aims to achieve over average position and develops the best return on investment. It is very needed when organisations having a marketplace which is very competitive and many same products or services are available for costumers. Let’s discuss those :
This strategy is very complex to implement for mainly small business because it includes making long term.commitment for providing services and products at a low price in the market. So organisations need to generate products at low cost or else it won’t make any profit.
So cost leadership means to be low-cost provider in the industry any huge scaled companies can offer and generate products at low cost by achieving economy of scale. So with that matters, there are tons of leadership factors like efficient operation, technological advancements, large distribution channels, bargaining power.
This strategy mainly looks at upgrading a competitive advantage by marketing and making available a different service or product where the service or product which is unique in some way to what competitors are providing. So this strategy needs heavy money for development and researching which you can not afford if you are a small business owner.
So successful differentiation has the accessibility to lower the price and improve brand loyalty from your consumers.
This strategy is similar to the first one which is cost leadership but a major difference is cost focus aims a specific segment through the market and segment which is produced the lowest price of services or product. So this strategy is needed to satisfy costumers and maximize your brand popularity too.
For an instance beverage business which offers mineral water targets market like Dubai where people only drink mineral water where you can sell at a lower cost than your competitors.
This strategy targets to differentiate within one or two competitors in particular segments. This process generated to meet demands of cost of users who refrain from buying competitor’s services only because of missing few features.
Look at Apple which is the top manufacture of electronics where it succeeds in a distinct spot in the market with its competitive strategy which is premium pricing policy and innovation. Their consistent practices and Miscellaneous products created a barrier for competitors in the market.