Courses of action adopted by an organization for each of its businesses separately to serve identified CG and provide value to customers by satisfaction of their needs

1. Ahsan Ahmad Baba

2. Courses of action adopted by an organization
for each of its businesses separately to serve
identified CG and provide value to
customers by satisfaction of their needs

3. In selecting business Strategy the firms determine
» Who it will Serve?
» What customer needs it will satisfy?
» How those needs will be satisfied?

4. Cost Leadership Differentiation
Focused Cost leadership Focused Differentiation
Integrated cost
leadership/
differentiation
Competitive Advantage
CompetitiveScope

5. An integrated set of actions designed to produce or
deliver goods or services at the lowest cost, relative to
competitors with features that are acceptable to
customers.

6. Tightly controlling production costs and overhead
Minimizing costs of sales, R&D and service
Building efficient manufacturing facilities
Monitoring costs of activities provided by outsiders
Simplifying production processes

7. DIFFERENTIATION STRATEGY
Value is provided to customers through unique features
and characteristics of an organization's products rather
than by the lowest price.This is done through high quality,
features, high customer service, rapid product innovation,
advanced technological features, image management, etc

8.  Developing new systems and processes
 Shaping perceptions through advertising
 Quality focus
 Capability in R&D
 Maximize human resource contributions through low turnover
and high motivation

9.  In focused cost leadership organizations not only compete on
price, but also select a small segment of the market to provide
goods and services. In focused cost leadership target is narrow.
For example a company that sells only to the U.S.
government.

10.  Companies following focused differentiation strategies produce
customised products for small market segments.They can be successful
when either the quantities involved are too small for industry-wide
competitors to handle economically, or when the extent of customisation (or
differentiation) requested is beyond the capabilities of the industry-wide
differentiator.

11.  This new strategy may become more popular as global competition
increases. Firms that use this strategy may see improvement in their ability
to:
 Adaptability to environmental changes.
 Learn new skills and technologies
 More effectively leverage core competencies across business units and
products lines which should enable the firm to produce produces with
differentiated features at lower costs.
 Thus the customer realizes value based both on product features and a low price