Select two of the competitive strategies and elaborate on th

Select two of the competitive strategies and elaborate on their value.

Solution

2 competitive strategies:

a. Cost leadership - In this strategy, a company seeks to become the low cost producer in the industry in which it operates. The cost advantage in terms of low cost may happen due to any of these factors - economies of scale, free access to limited raw materials in the industry etc. Cost leadership helps a company perform better than the competition due to its cost advantage which it passes onto the consumer in terms of lower prices.

b. Differentiation - In the competitive strategy of differentiation, a company seeks to offer unique and differentiated products and services. It adds a unique proposition to its products and services, giving more value (actual as well as perceived) to the consumers. Differentiation allows companies to charge a higher price from the consumers.