8 - Strategic Positioning Flashcards
(8 cards)
Describe Strategic Positioning
Where a business wants to be in the market, relative to other businesses.
Describe Porters Generic Strategies
(6 Points)
~ A tool that managers can use to strategically position themselves within the market
~ Should they become a low cost provider.
~ Should they have a form of differentiation, to be unique.
~ If they can do this, they would generate a sustained competitive advantage.
~ Then they would earn above average industry profitability.
~ Stuck in the middle, where the business has no clear strategic position means risk of failure.
Describe ‘Cost Leadership’ Of Porters Generic Strategy
(3 Points)
~ Low cost good, across the entire market.
~ Get this through EOS, increasing efficiency.
~ Can charge competitive prices, but produce for cheaper, so increased profit margins.
Describe ‘Differentiation’ Of Porters Generic Strategy
(3 Points)
~ Product, which is unique in the industry.
~ Better fits customer needs, which they will value and choose over rival products
~ Unique, means higher premium price.
Describe ‘Focus’ Of Porters Generic Strategy
(2 Points)
~ Focus on one specific segment, in a niche market.
~ A firm using this strategy, most likely has loyal customers and is hard to compete with.
What Are The Influences On The Choice Of A Positioning Strategy?
(6 Points)
~ Strategic direction.
~ Competitive nature of the industry.
~ Corporate objectives.
~ Core competences of the business.
~ PESTLE.
~ SWOT analysis.
What Are The Benefits Of A Competitive Advantage?
(5 Points)
~ Customer loyalty.
~ Charge premium prices.
~ Higher market share.
~ Higher added value.
~ Create barriers to entry.
What Are The Drawbacks Of A Competitive Advantage?
(3 Points)
~ Competitors actions and retaliation.
~ Hard to maintain barriers and low costs.
~ PESTLE changing.
