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2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Introduction
Strategy: Increasingly important to a firms
success and concerned with making choices
among two or more alternatives. Choices dictated
by
External environment
Internal resources, capabilities and core competencies
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Introduction
Satisfying customers is the foundation of
successful business strategies
Managing relationships with customers
Reach, richness, affiliation
Who will be served
What needs will be satisfied
How those needs will be satisfied
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(cont)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2. Differentiation
Competitive advantage: Differentiation
Competitive scope: Broad
Integrated set of actions designed by a firm to produce
or deliver goods or services at an acceptable cost that
customers perceive as being different in ways that are
important to them
Target customers perceive product value
Customized products differentiating on as many
features as possible
Examples: Apples iPod
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
(Contd)
Potential Entrants
Substantial barriers (see above) and would require significant resource
investment
Product Substitutes
Customer loyalty effectively positions firm against product substitutes
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
Geographic markets
West vs. East coast
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
4. Focused Differentiation
Competitive advantage: Differentiation
Competitive scope: Narrow industry segment
i.e., in the outdoor recreation business a firm that caters to fly fishing is following a
focused differentiation strategy (as opposed to discount stores that carry general fishing
gear)
High quality equipment
Knowledgeable personnel
Guided tours
Fly tying classes
Focused differentiation is the second of two focus strategies. A focused differentiation strategy
requires offering unique features that fulfill the demands of a narrow market (
Figure 5.7 "Focused Differentiation" ). As with a focused low-cost strategy, narrow markets are
defined in different ways in different settings. Some firms using a focused differentiation strategy
concentrate their efforts on a particular sales channel, such as selling over the Internet only.
Others target particular demographic groups. One example is Breezes Resorts, a company that
caters to couples without children. The firm operates seven tropical resorts where vacationers are
guaranteed that they will not be annoyed by loud and disruptive children.
While a differentiation strategy involves offering unique features that appeal to a variety of
customers, the need to satisfy the desires of a narrow market means that the pursuit of
uniqueness is often taken to the proverbial next level by firms using a focused differentiation
strategy. Thus the unique features provided by firms following a focused differentiation strategy
are often specialized.
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
5. Integrated CL/Differentiation
Efficiently produce products
with differentiated attributes
Efficiency: Sources of low cost
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
Information networks
Using technology to link suppliers, distributors and customers
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Contd)
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.