...The five generic competitive strategies that any industry uses are basically based on cost and product differentiation or a mix of both with a broader or focused implementation. In Cost Leadership strategy the industry focuses on producing low cost products in the existing market and tries to attract larger section of consumers by keeping relatively low price of products. On the other hand, differentiation strategy involves creating an edge over the competition by making the products and services different in a better way from that of the competitors. When we focus these any of these two strategies for a segment of product, market or consumer section it becomes the other two types of competitive strategy. The fifth category can be seen as a mix of all these strategies that is used wherever possible to get the maximum benefits for the industry, but it can be a little complex to implement effectively. When we look at the strategies that have been used by Chipotle Mexican Grill throughout, it mostly comes close to the differentiation approach. Chipotle is also a fast food chain that serves fast food that is freshly cooked for the customers shortly after the order being placed. There are many other big and small players in this category in the same market, such as McDonalds and Qdoba Mexican Grills etc., but Chipotle still remains the first choice among Mexican fast food lovers because Chipotles menu and food in that is different than that offered by the others. Chipotle strives to...
Words: 355 - Pages: 2
...Student: Professor: Course: Date: Product development Why new products fail in the market a). The most concerning issue we've experienced is absence of readiness: Companies are so centred on planning and assembling new products that they forget the vital work of getting prepared to market them. New products that were well thoroughly considered, obviously met a market need, had the right set of peculiarities and were legitimately planned, designed. Remedy A profound and definite comprehension of your customer is vital to the success of a product. Specifically, one has to comprehend what makes them purchase: what issue they need marketed and what they will pay to have it go away. One may have more than one customer. To discover more about them: meet with them, address and watch every customer. That is the level of point by point information about your market that you require in the event that you don't need your item, and all your diligent work in making it, to become lost despite a general sense of vigilance. b). Moreover, there are new products that, as in the recent past, were well thoroughly considered, plainly met a market require and had the right set of peculiarities. On top of that, the dispatch was likewise effective and produced a ton of investment. Therefore, there was solid introductory footing for these new items and all signs indicated achievement. Then again, before long, different operational issues (dependability, ease of use, execution, and so forth...
Words: 708 - Pages: 3
...Porter’s five forces Effectiveness of generic strategies The study of strategic management is quite stimulating. It gives a person insight in a lot of leadership and managerial roles. One such aspect I have come across is that of generic strategies. This has been quite stimulating to me as it relates to some questions I have had in the past. The question related to the effectiveness of applying human resources systems and strategies across many companies in various continents. After a long time of studying such a scenario, I concluded that having human resources systems that are used the world over would not be effective because of the diverse cultures that are found in the world. But in some field such as accounting there are standards that are applied world over. So what about generic strategies? Can these really be effective across industries, across continents and in varying business sizes and scope? This essay will answer these questions in a very simple way. The first thing to understand is what a generic strategy is. Generic strategy refers to the use of predetermined strategy, based on some basic principles and assumptions, that if applied would lead to business success. A generic strategy is an outline of what a firm must or can do so as to be successful, disrespectful of the industry or nature of business of that firm. The question is could all industries and firms be able to use prescriptions of a generic strategy and be successful. Examples of generic strategies...
Words: 1954 - Pages: 8
...Introduction………………………………………………………………………………… | 4 | Competitive Advantage…………………………………………………………………….. | 4 | Five Force Analysis………………………………………………………………….. | 5 | Threats of Substitutes Products and Service…………………………………………. | 5 | Buyer Power…………………………………………………………………………. | 6 | Supplier Power………………………………………………………………………. | 7 | Rivalry Among Existing Competitors………………………………………………. | 7 | The Threat of New Entrants………………………………………………………… | 8 | Cost Leadership Generic Strategy…………………………………………………… | 8 | Differential Generic Strategy………………………………………………………… | 9 | Focus Generic Theory……………………………………………………………….. | 9 | Ebusiness……………………………………………………………………………………. | 10 | Conclusion…………………………………………………………………………………... | 11 | References…………………………………………………………………………………… | 12 | Abstract The purpose of this paper is to discuss business decisions and business strategies to gain competitive advantage based on Michael Porter’s Five Force Model and Porter’s Three Generic Strategies. The Five Force Model are buyer power, supplier power, threat of new entrants, threats of substitutes of products and services and rivalry among existing competitors. Further discussion includes determining which Porter’s Three Generic Strategies to use to rebuild a failing eatery located downtown called Broadway Café. The Three Generic Strategies are Cost Leadership Generic Strategy, Differential Generic Strategy and Focus Generic Strategy. I will also discuss how ebusiness can help the Broadway Café achieve a competitive advantage. Focus...
Words: 2638 - Pages: 11
...Analysis Of Porter's Generic Strategies Strategic Themes Provide product that is on-trend, differentiated, distinctive and inspired by select popular fashion trends and pop culture for all of our target customers, but with a primary focus on expressive women and expressive moms. Improve brand marketing effectiveness by implementing a “house of brands” architecture that covers all of our major customer segments and builds distinctiveness and focus in our product assortment. Provide a great shopping experience through improved customer engagement, and leveraging our real estate to support new store formats consistent with the repositioning of our brand. Maintain efficient operations by building greater speed and flexibility into the supply chain to deliver the right product to the right store at the right time in the appropriate proportions across the approximately 4,600 store network. On-Trend Targeted Product We identifies fashion trends timely and integrates these insights into on-trend product in our stores. Generic Strategy - Porter Porter’s generic strategies: low cost, differentiation, specialization. Key stakeholders & their influence. PEST model, macro environment. – Five Forces model, micro/industry environment. Porter's Five Forces Model And Three Generic Strategies Porter's Five Forces Model Porter's Five Competitive Forces model is a framework made by Michael Porter that is used by businesses when thinking about business strategy and the impact of...
Words: 1660 - Pages: 7
...IDENTIFYING COMPETITIVE ADVANTAGES Video: Panera Bread Cohesion Case: Competitive Advantage:Business Dilemma To survive and thrive, an organization must create a competitive advantage. A competitive advantage is a product or service that an organization's customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage. In turn, organizations must develop a strategy based on a new competitive advantage. When an organization is the first to market with a competitive advantage, it gains a first-mover advantage. The first-mover advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage. FedEx created a first-mover advantage by creating its customer self-service software, which allows people and organizations to request parcel pickups, print mailing slips, and track parcels online. Other parcel delivery companies quickly began creating their own online services. Today, customer self-service on the Internet is a standard for doing business in the parcel delivery business. Page 14 As organizations develop their competitive advantages, they must pay close attention to their competition through environmental scanning. Environmental scanning is the acquisition and analysis of events and trends in the environment external to an organization. Information technology...
Words: 3191 - Pages: 13
...Broadway Cafe | CIS 500 | Jaya Nanditha, Roslyn Hall, Fardaoussi Mohamed, Francis K. Dunor, | | 2/4/2012 | The purpose of this paper is to discuss business decisions and business strategies to gain competitive advantage based on Michael Porter’s Five Force Model and Porter’s Three Generic Strategies. The Five Force Model is buyer power, supplier power, threat of new entrants, threats of substitutes of products and services and rivalry among existing competitors. Further discussion includes determining which Porter’s Three Generic Strategies to use to rebuild a failing eatery located downtown called Broadway Café. The Three Generic Strategies are Cost Leadership Generic Strategy, Differential Generic Strategy and Focus Generic Strategy. We will also discuss how ebusiness can help the Broadway Café achieve a competitive advantage. Focus of ebusiness will be marketing, finance, accounting, sales, customer service and human resources. Final Project: Broadway Café - Part 1 & 2 | The Broadway Cafe This paper will discuss creating Competitive Advantage in business through business decisions using the Porter’s Five Forces Analysis and Porter’s Three Generic Strategies. In addition, this paper will discuss how ebusiness can be used in making business decisions to gain competitive advantage. A fictitious business, called the Broadway Café will be the model business in which these business practices will be applied. The Broadway Café is a business in the decline despite...
Words: 2129 - Pages: 9
...25, 2015 1. Explain why the concept of competitive advantage is central to the study of strategic management. Answer: The strategic management involves developing and maintaining competitive advantages. These competitive advantages need to be created and sustained effectively to overcome the 5 competitive forces. Only by overcoming competitive forces can firms achieve above average returns. Because it’s always about ensuring your organization performs successfully. 2. Briefly describe the three generic strategies-overall cost, leadership, differentiation, and focus. Answer: Overall cost leadership generic strategy-involves developing a competitive advantage based on low cost position while appealing to an industry wide market. Differentiation generic strategy- involves developing a competitive advantage based on uniqueness perceived by the customer while appealing to industry wide market. Focus generic strategy involves concentration on a narrow market segment while creating a competitive advantage of either uniqueness perceived by the customer or low cost position. 3. Explain the relationship between the three generic strategies and the five forces that determine the average profitability within an industry. Answer: The five forces limit industry profitability. Business units that identify with multiple generic strategies will have higher performance than those that identify with just one generic strategy. The highest performing business units identified...
Words: 686 - Pages: 3
...they combine the power of the information age with traditional business methods. True False 2. Competitive intelligence is information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making. True False 3. The information age is the present time, during which infinite quantities of facts are widely available to anyone who can use a computer. True False 4. Technology provides countless business opportunities, but can also lead to pitfalls and traps for a business. True False 5. Top managers use social intelligence to define the future of the business, analyzing markets, industries and economies to determine the strategic direction the company must follow to remain unprofitable. True False 6. A variable is a business intelligence characteristic that stands for a value that cannot change over time. True False 7. Companies update business strategies continuously as internal and external environments change. True False 8. For an organization to succeed, every department or functional area must work independently to be most effective. True False 9. Porter's Five Forces Model outlines the process for a sales strategy. True False 10. With the Five Forces Model, companies should watch the forces in the market. If the forces are strong competition generally...
Words: 28627 - Pages: 115
...Types of competitive advantage and sustainability 3 generic strategies that a firm can use to overcome the five forces and achieve competitive advantage. 1. Overall cost leadership, is based on creating a low-cost-position. 2. Differentiation requires a firm to create products and/ or services that are unique and valued. 3. Focus strategy directs attention toward narrow product lines, buyer segments, or targeted geographic markets and they must attain advantages either through differentiation or cost leadership. Overall cost leadership Overall cost leadership: a firm’s generic strategy based on appeal to the industrywide market using a competitive advantage based on low cost. This strategy requires a tight set of interrelated tactics that include: * Aggressive construction of efficient-scale facilities * Vigorous pursuit of cost reductions from experience * Tight cost and overhead control * Avoidance of marginal customer accounts * Cost minimization in all activities in the firm’s value chain, such as R&D, service, sales force, and advertising. Experience curve: the decline in unit costs of production as cumulative output increase. Competitive parity: a firm’s achievement of similarity, or being “on par”, with competitors with respect to low cost, differentiation, or other strategic product characteristic. Overall cost leadership: improving competitive position vis-à-vis the five forces * An overall low-cost position enables...
Words: 677 - Pages: 3
...Student Name-Tin Thet Thet Han Matrix Number -132015090022 MSU/MBA “Apple Case Assignment” Questions (1)Do you agree or disagree that Apple’s iTunes, iPhone apps, iPad apps give the company a competitive advantage? Be sure to justify your answer. Yes, I agree that Apple’s iTunes, iPhone apps, iPad apps give the company a competitive advantage. Apple let outsiders offer software for the iPhone and in less than 6 months, more than 10,000 applications had been created. Also, more than 15,000 applications are available at its app store section of iTunes, and they have been downloaded a total of 500 million times. Now, many of the iPhone apps are available for the iPad. Moreover, the unique feature of Apple’s competitive advantage is that they come from customers and users, not employees .All of the above data and facts can justify that those apps have a competitive advantage among. (2)Why are data, information, business intelligence, and knowledge important to Apple? Give an Example of each type in relation to the iPad. Through the strategic use of data, information, business intelligence and knowledge , Apple is able to track the use of it and programs to see if they are being accepted and used by many consumers , or don’t attract attention and fail. Another reason that reason that data and information are very important to Apple is that having the ability to show outside accessory and app companies the usage of Apple products in comparison to others .When Apple can provide...
Words: 1254 - Pages: 6
...Development- Yes * Exchange upgrades * New products for margin methodologies * Developing apps to minimize wiring between banker and clients * Upgrading trading space with more IT applications Human Resource Management- No I don’t believe HRM provides value to a costumer. Although behind the scenes they are critical to the firm’s operations and especially qualified hiring. General Administration- yes General Administration makes it possible for the firm to operate in such a way that it is able to provide clients with strategic and legal advisory policies. Chapter Questions 1. Competitive advantage is essential to strategic management because businesses rely on diagnosing what will separate their product/service from their competition. Depending on what target market a company is looking to focus on. To be successful they need implement a strategy...
Words: 411 - Pages: 2
...and Hatch (1997) also suggested that competitive strategy requires both the exploitation of existing internal and external firm-specific capabilities in order to develop new ones. To analysis the microenvironment of a company, the competitive environment must be given the great importance, by trying to construct the competitive strategy, an assessment of the external environment will help to answer one basic question that is what will happen in the markets in which company choose to compete(Asch & Bowman, 1996)? By answering this, the company can therefore to find a well position for its company and make their own strategies but in the meantime, the other issues will be raised, that is what markets are the company are competing in? In order to define the market the firm is, company need to know well about what customers needs, and who it is the customers see the firm will competing with. Porter (1980) said that “the first step in structural analysis is an assessment of the competitive environment – the basic competitive forces and the strength of each in shaping industry structure. The second is an assessment of the company's own strategy-of how well it has positioned itself to prosper in this environment.” When these two are taken together, these two will be the key factors to forecasting a company earning power. 2. Literature Review 2.1 The theory of Porter's five forces The successful of a company's competitive strategy depends on how it relates to its external...
Words: 2007 - Pages: 9
...environmental forces currently affecting the industry through PEST analysis. Secondly, the implications of the changes in business environment that is internal factors through porter's five force theory. Finally, the use and limitations of the tools applied to solve case are discussed. ORIGIN AND EVOLUTION The present pharmaceutical industries are non-assembled and more of competitive but it had emerged in early 19th century in the Rhine valley near Basel Switzerland where dyestuffs were found to have antiseptic properties. Companies like Hoffman-la rochy, Sandoz, Novartis are all started as Rhine based family dyestuff and chemical companies, which are still doing tremendous business even to day. Slowly these chemical companies started making pharmaceuticals and synthetic chemicals and evolved as global players. In early 1940's the industry showed drastic changes such as introduction of penicillin and other drugs. In 1960's industry growing rapidly with the setting up of R&D not only this economies prospered by the spending on health care in same period. In 1970's industry showed major development but a strong regulatory controls also came into existence with this development, and this regulatory controls had removed the rule of permanent patent to some fixed period which resulted in birth of branded generics. ENVIRONMENTAL FORCES...
Words: 2941 - Pages: 12
...Strategy requires an organisation to make trade-offs in competing with other firms by choosing what not to do. The business environment has now become so competitive requiring leaders to develop effective strategies that result in improved competitive. Technology has now made it so easy for competitors to match one’s product within a short space of time. Changes in customer tastes and preferences require robust systems and strategies to maintain current market share profitably and ensure growth. It is within this spectrum that Michael Porter has become a well-known contributor in the field of strategic management as he shades light on which elements to consider in coming up with a strategy for both domestic and international markets. A good strategy will result in the creation of a unique and valuable position, involving a different set of activities. Strategic position emerges from three distinct sources which are serving few needs of many customers, serving broad needs of few customers and serving broad needs of many customers in a narrow market. After positioning itself, an organisation must ensure that its strategic efforts results in creating “fit” among a company’s activities. Fit has to do with the ways a company’s activities interact and reinforce one another. In his endeavour to build strategic intent within organisations, Michael Porter is well known for the following contributions in the field of corporate strategy: 1. Generic Strategies 2. Value Chain ...
Words: 4555 - Pages: 19
