This document summarizes three marketing strategies, namely: cost leadership, differentiation and focus. Here is an excerpt regarding them: "Cost leadership is to impose more or less expensive prices than its competitors. The goal here is to reduce the cost incurred by the product, improving the productivity in two ways: - by concentrating the management efforts on the product (manufacture, storage, transportation), and by maximizing the sales volume (search for the effect of experience and economies of scale). This strategy may be effective for industries of volume, when the effect of experience and economies of scale are important and when the possibilities of differentiation are few."
Tags: Marketing Strategy, Cost Leadership, Cost Differentiation, Cost Focus
[...] Analysis of Porter's Five Forces Overview 1 - The cost leadership 2 - Differentiation 3 - Concentration "In each market, the first thing to do is to ask on what competitive advantage will the company support for its development to be cheaper or be better.”Mr. Porter The cost leadership Definition: Cost leadership is to sell more or less expensive than its competitors. The objective here is to reduce the cost of the product and improve the productivity in two ways: - By concentrating management efforts on the product (manufacturing, storage, transport). [...]
[...] The company seeks to acquire market power through the specific characteristics of its offer and it causes a monopolistic competition. The investment is essential in the relationship with the customer: Marketing studies, communication . Benefits Disadvantages Customer loyalty on solid - Attention to foundations derivatives of the production costs The company may increase of over-quality its prices and margins - Risk of counterfeiting Potential market share limited This strategy is attractive in markets or differentiation possibilities are numerous. Differentiation must be: - Perceptible to the consumer - Motivating to justify a price increase - Defensible not to be imitated too easily This strategy implies that the company has an advantage: - Technical (technologically advanced products for example) - Quality (more efficient products) - Business (Branding) III) The concentration Definition: The concentration is to be the specialist of a specific target. [...]
[...] The objective here is to satisfy the other needs of a small target, either by dominating costs (e.g. in the Lidl Hard Discount), or by seeking differentiation (Ferrari, Audi . We talk about niche strategy or niche. Benefits Disadvantages Specialist image - Risk of being attacked Defensible position: Large by a large competitor without market share in a small niche immediate profitability target Suitable for SMEs - Price differences must be justified Bibliography - Book "Strategic choices and competitive," Mr. Porter - Book "The Competitive Advantage" by M. [...]
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