4 Flashcards
- is based on maintaining very high quality, which in turn determines higher prices for this product than for those competing with it.
Such companies must invest much more in advertising to convince customers of the uniqueness and exclusivity of their product.
Strategy of achieving the highest quality
the price is set as low as possible, while assuming that the demand for a given product is price sensitive (i.e. the cheaper the higher the sale, the more customers).
According to companies using this strategy, it leads to lower costs and higher profits in the long run.
Strategy to maximize sales growth
- they set the price for their product depending on the estimated demand for a given product on several markets.
They do not count on quick and sometimes one-time profit, but on maximizing it in the long run, which will allow them to shape their market position and increase their share in it.
Maximized current revenue strategy
-estimate the demand for the product being marketed at different prices to be able to choose the scale of production that will ensure the highest current profit.
In other words, if a product sells well regardless of the price, do not lower it, because it will not increase sales.
Strategy to maximize profit
this strategy is chosen by companies that are experiencing certain difficulties, assessed by specialists as short-lived, involving, for example, intense competition or changing buyers’ preferences.
Under these conditions, companies partly give up profit for survival. They sell their products at production costs.
Survival strategy
Most common mistakes made when building a business strategy
- Focus on short term goals
- Incorrect initial analysis (SWOT, Porter)
- Superficial analysis of the competition
- Skipping employees in the process of building strategies
- Skipping communication of the adopted strategy
- Too low level of aspiration, innovation, digitization
