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Business strategy and models - Generic competitive strategies

Q: What are the 3 means of achieving competitive advantage?

Having structurally lower costs than your competitor. Having products that are differentiated from competitor's products or services that are so valued by customers that it can charge higher prices that cover the additional costs of differentiation . Focusing either on a narrow or a broad scope .

Q: What are the 4 key cost drivers that help deliver cost leadership?

Input costs Economics of scale - important when there are high fixed costs. Increasing scale reduces average costs of operation. Experience - cumulative experience gained by an organisation leads to reduction in unit costs. Product/process design

Q: What are the 2 requirements for cost-based strategies?

A business's cost structure needs to be lowest cost (i.e. lower than all competitors) Low costs should not be pursued in total disregard for quality .

3 important questions on Business strategy and models - Generic competitive strategies

What are the 3 means of achieving competitive advantage?

Having structurally lower costs than your competitor.
Having products that are differentiated from competitor's products or services that are so valued by customers that it can charge higher prices that cover the additional costs of differentiation.
Focusing either on a narrow or a broad scope.

What are the 4 key cost drivers that help deliver cost leadership?

Input costs
Economics of scale - important when there are high fixed costs. Increasing scale reduces average costs of operation.
Experience - cumulative experience gained by an organisation leads to reduction in unit costs.
Product/process design

What are the 2 requirements for cost-based strategies?

A business's cost structure needs to be lowest cost (i.e. lower than all competitors)
Low costs should not be pursued in total disregard for quality.