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Gregory Abramov
Gregory Abramov

Porter Competitive Strategy Pdf Download

Low-cost strategy emphasizes producing standardized products at a very low per-unit cost for consumers who are price sensitive [28]. According to Griffin [31], low-cost strategy is a strategy in which an organization attempts to gain a competitive advantage by reducing its costs below the costs of competing firms.

Porter Competitive Strategy Pdf Download

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It is worth mentioning that even differentiation strategy does not defend the firm strategy from imitation by competitors forever, and David [34] wrote that differentiation does not guarantee competitive advantage, especially if standard products sufficiently meet customer needs or if rapid imitation by competitors is possible. According to him, successful differentiation can mean greater product flexibility, greater compatibility, lower costs, improved service, less maintenance, greater convenience, or more features.

Focus strategy can be especially attractive under the following conditions (when the target market niche is large, profitable, and growing; when industry leaders do not consider the niche to be crucial to their own success; when industry leaders consider it too costly or difficult to meet the specialized needs of the target market niche while taking care of their mainstream customers; when the industry has many different niches and segments, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources; when few, if any, other rivals are attempting to specialize in the same target segment).

Porter [18] stressed that if firms want to have a strategy in order to achieve a competitive advantage they should pursue three strategies, that he called generic strategies. In accordance with his result and based on the empirical results of this study, Eq. 6 is presented, which shows the participation of each strategy in firm performance.

On the contrary, a firm that pursues differentiation strategy in the short- and long-term period enables to increase the firm performance. In the short-term period, this method brings profit to the firm as a result of the competitive advantage that is provided by a unique product/service with higher quality than competitors. In the long-term by pursuing the differentiation strategy provides an added value of all industry. As a consequence of strategy imitation by competitors provides a higher quality of product/service that leads the industry on a higher level of quality. By analyzing very clearly, how works this strategy and what advantages it will bring in the industry? It can be explained as: the main objective of the organization managers and strategists is increasing the firm performance over time, but the existing of numerous competitors makes it not easy to achieve it. In the competitive market, the way that firm managers follow to achieve the objective is product/service differentiation, by trying to create something unique in order to be attractive for consumers. This uniqueness can be done by increasing the existing product/service values that are present in the market or bringing new and better products/services in the market. Both of these ways set a higher value of products/services in the industry.


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