Porters Genetic Strategies Definition General o Explain How does it give competitive advantage Cost leadership Definition and

tion and explanation and example Differentiation Strategy Definition and explanation and example The Focus Strategy Definition and explanation and example How to choose the right Strategy and the steps to do it Steps to choose the right strategy using Porters Genetic Strategies

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Compare and constrast the strategies of obtaining competitive advantage thorugh cost and differentiation competitive strategies in creating economic prodits. Be sure to carefully define the terms competitive advantage, cost and differentiation. Outline the key drivers of both cost(for example economicies of scale and differentiation strategies. Do you think that a cost and differentiation competitive strategy can be simultaneously achieved by a firm. Please justify your answer.

Cost leadership The meaning of cost leadership is to bring down your cost o as low as possible. Once you are able to bring down your cost you will be an able to gain a competitive advantage by charging a lower price. Michael e porter suggests that low production cost is equals to low price increasing sales volume. It says that I will become the market leader that is my competitive advantage. Examples of companies that go for cost leadership. Cherry QQ, Arkira, bata Differentiation

I can adopt cost leadership as I am able to produce a lower cost than my competitors and my market target is the whole world. I can also achieve economies of scale with every additional unit I produce. To gain more market share, I can produce at low cost and sell at low price. 1. How to obtain Cost Advantage? 1. Determine and Control Cost Drivers 2. 2. Examples of keeping cost low 1. I have access to cheaper technologies or raw materials. 2. Better technology can help save cost as the machine can work for longer hours and produce more. 3. Im able to produce more in a smaller working place. 4. Keep production cost low and overheads (fixed cost) 5. Paying lower salary, locating my office in a place where the rent is cheaper. 6. I can also outsource some work if it can help to cut cost 3. Disadvantages of Cost leadership 1. If it is sold at low price, customer will have the mindset of the low product quality. 2. Not as suitable for small companies. 3. Low customer loyalty as customer only look at their price. If there is a lower price for that product customer will change product easily.

Q 1 and q2 How going to explain this advantage Portal generic Competitive advantage