Session 1 Flashcards
(22 cards)
Differentiation is the process by which a company xxxxxx its products or services from those of its xxxxx in ways that appeal to a targeted audience. This can involves unique product xxxx, branding, customer service or other factors that provide added xxxx to customers
distinguishes. competitors. Features. Value.
The definition of competitive advantage
A condition or circumstance that puts a company in favorable or superior business position
What does Michael Porter’s Generic Strategies framework show?
The 3 primary ways organisations can achieve a competitive advantage, categorised to two dimensions.
Competitive advantage:
Lower cost: Become the lowest-cost producer, to have lower prices or maintain higher margins.
Differentiation: Create unique products or services that offer value beyond a low price.
Competitive scope:
Broad target: Companies target a wide market or industry segment.
Narrow Target: Companies focus on a specific market segment or niche.
What is the Porter Generic Strategy when aiming to have a lower cost to a broad target audience
Cost leadership. For example Ryanair and Primark, high use, efficient turnaround time, no frills service model, low overhead costs
What is the Porter Generic Strategy when aiming to have a unique product or service to a broad target audience
Differentiation. Achieved through innovation, quality, branding, customer service.
For example Burberry differentiates through iconic british heritage, quality products and strong brand identity appealing to a broad global audience
What is the Porter Generic Strategy when aiming to have a lower cost to a narrow target audience
Cost focus. Tailoring products or services to meet the specific needs of the target market while maintaining low costs.
For example, Aldi. Provides limited selection of groceries at low prices, targeting budget-conscious shoppers in specific regional markets. Another example poundland.
What is the Porter Generic Strategy when aiming to have a unique product or service to a narrow target audience
Differentiation focus. Understand the unique needs and preferences of the target market.
For example Rolls Royce. Highly customised luxury cars that cater to affluent customers. Fortnum and Mason appeal to wealthy consumers.
What 3 things do you need to build a strong competitive advantage
Market knowledge. Competitors’ intelligence. Strategic alignment of your organisation.
As part of market knowledge and research, must we focus on enhancing customer satisfaction? why?
Yes. Happy customers are loyal customers. They come back and recommend us to others, repeat business and positive word of mouth.
Qualitative tools for market research
Focus groups, in-depth interviews, ethnographic research, projective techniques.
What’s an ‘Ethnographic’ research techniques.
observing consumers in their natural environment to understand their behavior and culture.
What’s an ‘Projective Techniques’ research tool
using stimuli to elicit responses that reveal hidden thoughts and feelings (e.g., word association, sentence completion, picture interpretation).
Quantitative tools for market research
Surveys, experiments, observational research, panels, scanner data
What’s an ‘Panels’ research tool
consist of a group of individuals or households who regularly provide data over time. This longitudinal data collection allows researchers to track changes and trends in consumer behavior, attitudes, or preferences. Panels are useful for understanding how these factors evolve over time and how they may be influenced by external factors or marketing efforts.
Secondary data tools for market research
Internal company records, external published sources, syndicated data services
Digital tools for market research.
Web analytics. Social media monitoring. Online surveys and polls. Online focus groups, Mobile research.
The steps to conduct a competitor analysis
Identify Market Gaps (what opps have they missed).
Define and Enhance Market Position (Understand and clearly communicate how your business stands out in the market).
Risk Management (Anticipate and mitigate potential threats by understanding competitors’ strategies and market trends.)
Enhance Marketing Strategies (: Improve your marketing efforts by learning from competitors’ successes and failures.)
What does Porters Five Forces Model show? (just the purpose)
The competitive environment of an industry.
You can use the framework to understand the strengths of an org’s current competitive position and the strength of a position it’s considering moving into.
Areas of Porters Five Forces
Threat of new entry.
Competitive rivalry.
Buyer power.
Threat of substitution.
Supplier Power.
What’s a ‘red ocean’ strategy?
Competing in existing market spaces where boundaries are defined, and companies try to outperform rivals to grab a larger share of existing demand. Need to focus on differentiation and low cost strategies.
What’s a ‘blue ocean’ strategy?
Creating new market spaces where competition is irrelevant. Focus on value innovation - aligning innovation with utility, price and cost positions.
