|Five Generic Competitive Strategies--Which One to Employ?|
This chapter describes the five basic competitive strategy options —which of the five to employ is a company's first and foremost choice in crafting an overall strategy and beginning its quest for competitive advantage. A company's competitive strategy deals exclusively with the specifics of management's game plan for competing successfully—its specific efforts to please customers, its offensive and defensive moves to counter the maneuvers of rivals, its responses to whatever market conditions prevail at the moment, its initiatives to strengthen its market position, and its approach to securing a competitive advantage vis-à-vis rivals. Companies the world over are imaginative in conceiving competitive strategies to win customer favor. At most companies the aim, quite simply, is to do a significantly better job than rivals of providing what buyers are looking for and thereby secure an upper hand in the marketplace.
A company achieves competitive advantage whenever it has some type of edge over rivals in attracting buyers and coping with competitive forces. There are many routes to competitive advantage, but they all involve giving buyers what they perceive as superior value compared to the offerings of rival sellers. Superior value can mean a good product at a lower price; a superior product that is worth paying more for; or a best-value offering that represents an attractive combination of price, features, quality, service, and other appealing attributes. Delivering superior value—whatever form it takes— nearly always requires performing value chain activities differently than rivals and building competencies and resource capabilities that are not readily matched.