A competitive strategy concerns
the specifics of management's
game plan for
competing successfully and
achieving a competitive edge
over rivals.
A low-cost leader's basis for
competitive advantage is lower
overall costs than competitors.
Successful low-cost leaders
are exceptionally good at finding
ways to drive costs out of
their businesses.
Success in achieving a low-cost
edge over rivals comes
from exploring all the avenues
for cost reduction and pressing
for continuous cost reductions
across all aspects of the company's
value chain year after
year.
A low-cost provider is in the
best position to win the business
of price-sensitive buyers,
set the floor on market price,
and still earn a profit.
A low-cost provider's product
offering must always contain
enough attributes to be attractive
to prospective buyers—low
price, by itself, is not always
appealing to buyers.
The essence of a broad differentiation
strategy is to be
unique in ways that are valuable
to a wide range of customers.
Easy-to-copy differentiating
features cannot produce
sustainable competitive
advantage.
A differentiator's basis for competitive
advantage is either a
product/service offering whose
attributes differ significantly
from the offerings of rivals or a
set of capabilities for delivering
customer value that rivals don't
have.
Any differentiating feature that
works well is a magnet for
imitators.
Even though a focuser may be
small, it still may have substantial
competitive strength because
of the attractiveness of
its product offering and its
strong expertise and capabilities
in meeting the needs and
expectations of niche
members.
