Define generic strategies and show how they relate to a firm’s strategic position. Describe the drivers of low-cost, differentiation, and focus strategic positions. Identify and explain the risks associated with each generic strategy position | Chapter Five Crafting Business Strategy OBJECTIVES Define generic strategies and show how they relate to a firm’s strategic position 1 Describe the drivers of low-cost, differentiation, and focus strategic positions 2 Identify and explain the risks associated with each generic strategy position 3 Show how different positions fit with various stages of the industry life cycle 4 Evaluate the quality of the firm’s strategy 5 JUDO STRATEGY “At its heart, judo strategy is about developing a deep understanding of your competition and the moves that will turn your competitors’ strength to your advantage.” – David Yoffie and Mary Kwak From Judo Strategy Full quote: “The creation of something new is not accomplished by the intellect but by the play of instinct acting from inner necessity. The creative mind plays with the objects it loves.” - Carl Jung THE RACE TO THE FUTURE IS ON Companies can be classified as: Drivers Passengers Road Kill Which will get to the future first? . | Chapter Five Crafting Business Strategy OBJECTIVES Define generic strategies and show how they relate to a firm’s strategic position 1 Describe the drivers of low-cost, differentiation, and focus strategic positions 2 Identify and explain the risks associated with each generic strategy position 3 Show how different positions fit with various stages of the industry life cycle 4 Evaluate the quality of the firm’s strategy 5 JUDO STRATEGY “At its heart, judo strategy is about developing a deep understanding of your competition and the moves that will turn your competitors’ strength to your advantage.” – David Yoffie and Mary Kwak From Judo Strategy Full quote: “The creation of something new is not accomplished by the intellect but by the play of instinct acting from inner necessity. The creative mind plays with the objects it loves.” - Carl Jung THE RACE TO THE FUTURE IS ON Companies can be classified as: Drivers Passengers Road Kill Which will get to the future first? STRATEGIC POSITIONING SHOULD IMPROVE PROFITABILITY Where managers of a company situate that company relative to it’s rivals along important competitive dimensions Definition Purpose To reduce the effects of rivalry and thereby improve profitability No advantage over rivals Advantage over rivals Low-cost Differentiation Description Produce an essentially equivalent product at a lower cost Produce a differentiated product and charge suffici-ently higher prices to more than off-set the added costs of differentiation A FIRM CAN GAIN ADVANTAGE OVER RIVALS IN TWO WAYS Adapted from poster, . Competitive strategy, 1980. Low-cost Differentiation Strategic advantage Strategic target Narrow (., particular segment only) Broad (., industry wide) Broad differentiation Focused cost leadership Focused differentiation Broad low-cost leadership THE STRATEGIC POSITIONING MODEL LOW-COST LEADERSHIP AND DIFFERENTIATION OFFER GREATER MARKET SHARE AND/OR PROFITS Examples Benefits .
