CHAPTER 5: THE FIVE GENERIC COMPETITIVE STRATEGIES

In Gamble, Thompson and Peteraf’s Essentials of Strategic Management chapter five

they wrote about some generic competitive strategies that can help us out. It focuses on how we
gain an understanding of how each of the five generic competitive strategies go about building
competitive advantage and delivering superior value to customers. First let’s define what
Competitive Strategy is, it deals exclusively with management’s game plan for competing
successfully and securing a competitive advantage over rivals. Competitive Strategy is a long-
term action plan of a company which is directed to gain competitive advantage over its rivals
after evaluating their strengths, weaknesses, opportunities and threats in the industry and
compare it with your own. Next, I will give the five generic competitive strategies first is Low-
cost provider means seeks to sell its products at the lowest price it can, while still making a profit
so that it can draw customers to the market. This is the broad version of the low-cost
strategy because such companies try to appeal to a broad market. Second is Broad Differentiation
which means it is a competitive strategy used by companies to offer unique product attributes or
other characteristics that set the company apart from its competitors. Third is Focused Low-cost
it means where businesses selling similar products in a given niche lower their prices in order to
increase revenue and gain a competitive advantage. Fourth is Focused Differentiation is a win
market share by offering unique features that are valued by their customers. And lastly is best-
cost provider relies on offering customers better value for money by focusing both on low
cost and upscale difference. The ultimate goal of the best-cost strategy is to
keep costs and prices lower than other providers of similar products with comparable quality and
features.
CHAPTER 6: SUPPLEMENTING THE CHOSEN COMPETITIVE STRATEGY— OTHER
IMPORTANT STRATEGY CHOICES

In Gamble, Thompson and Peteraf’s Essentials of Strategic Management chapter six they
wrote about supplementing the chosen competitive strategy other important strategy choices. It
give us learning objective that cope up where we can Learn whether and when to pursue
offensive strategic moves to improve a company’s market position, Learn whether and when to
employ defensive strategies to protect the company’s market position, Recognize when being a
first mover or a fast follower or a late mover can lead to competitive advantage, Learn the
advantages and disadvantages of extending a company’s scope of operations via vertical
integration, Understand the conditions that favor farming out certain value chain activities to
outside parties, Gain an understanding of how strategic alliances and collaborative partnerships
can substitute for mergers and acquisitions or vertical integration, and lastly become aware of the
strategic benefits and risks of mergers and acquisitions. Companies sometimes use strategic
alliances or collaborative partnerships to complement their own strategic initiatives and
strengthen their competitiveness. Such cooperative strategies go beyond normal company‐to‐
company dealings but fall short of merger or full joint venture partnership.