Strategy

Strategic Advantage

By Michael Porter

Cost Leadership

Set to become low cost producer in your industry
Achieve parity or at least cost proximity in the basis of differentiation
Often achieved by economies of scale

Differentiation

Seek to be unique in your industry along dimensions widely appreciated by buyers
Cannot ignore cost position
Areas of differentiation could be: product, distribution, sales, marketing, service, image, etc.

Focus

Set to be the best in a segment and group of segments
2 ways: Cost Focus and Differentiation Focus

Stuck in the Middle - Loose

Core Competence

By Hamel and Prahalad

Tests Identifying a Core Competence

Provides potential access to a wide variety of markets
Makes significant contribution to the benefits of the product as perceived by the customer
Core Competence should be difficult of imitate

Customer is at the core of the Core Competence design.

5 Competitive Forces

By Michael Porter

Entry of Competition

Economies of scale
Capital requirements
Customer switching cost
Access to distribution channels
Access to technology
Brand loyalty
Retaliation from existing industry players
Government regulation

Thread of Substitutes

Bargaining power of buyers

Bargaining power of suppliers

Rivalry among the existing players

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