kk7 strategic management by Porter's generic strategies Flashcards
(13 cards)
what is strategic management
designed to get you competitive advantage over the competition.
what are the two stratagies?
the differentation advantage and the cost advantage/ lower cost
what is cost advantage /lower cost
C A is gained through redusing the costs of the business, allowing it to operate with larger profit margins compared to its market rivils. -
why is lower cost good?
competitive advantaage and you can use the money for marketing, biloards and research
what is cost leadership
seeking to become the business with the lowest costs in the market
what is the definition of cost and price
cost is how much it costs the business to produce
price is how much the customer pays
costs ad and dis
ad- attracts customers with lower price. improving efficiency- minimising idle stock on shelves
dis- perception of lower quality
what are the two types of lower costs
lower cost and lower price- this is called undertaking, improving sales
lower cost and same price- this increases profit margin
what is differentiation advantage
C A is gained through differentiating their good or service from others in the market- could be unique/ exclusive or more attraction the others
things associated with differentiation advantages
higher quality price tag, premium price tag,
ad and dis for differentiation
ad- more money and brand loyalty
dis- to different- if ones expensive and ones medium people will go for medium.
higher cost for production.
what is multiple branding
apealing to different customers by creating different products under the same brand. like kegsly for special k and cornflakes. different products competing in the same area with the same brand. all profit goes to you. own both brands
what cant you forget with this strategy?
you cant do both but you cant ignore the other
