Porter

• What is porters overlying statement?

  to thrive in a competitive market, every business needs a clear strategy to achieve a sustainable competitive advantage
• What are the two types of segmentation?

  mass vs niche

  low cost vs diversification
• Why use mass market segmentation?

  Appeal to everyone

  low price

  inelastic demand
• Why use niche market segmentation?

  slice of the market so target specific people

  charge higher prices

  elastic demand
• What is the cost leadership strategy?

  Lowest cost in a mass market

  leveraging economies of scale

  creating low cost production facilities

  selling a bare bones version of a product or service

  employing tight Cost control
• Why is cost leadership a good strategy?

  very profitable as very cheap to make
• Examples of companies that use cost leadership?

  Amazon

  Walmart

  Ryanair
• What is the diversification strategy?

  having a stand out USP such as unique product features and unique branding or design
• Why use the diversification strategY?

  Higher quality so can charge higher prices

  higher customer service levels

  loyal customers and therefore inelastic demand
• Examples of companies that use differentiation strategy?

  John lewis

  apple

  lego
• What is the cost focus strategy?

  where you set out to be the lowest cost producer for a specific niche within an industry
• Why is cost focus different to cost leadership?

  Firms will target a narrow slice of an industry at the exclusion of all other segments
• What is an example of a company that uses cost focus?

  monster energy
• What is the differentiation focus strategy?

  most unique and desirable provider for a specific niche within an industry
• How is differentiation focus different to differentiation?

  Firms target a narrow slice of an industry at the exclusion of all other segments
• What are some examples of companies that use differentiation focus?

  whole foods

  red bull
• What is the stuck in the middle strategy?

  When you aim for more than one generic strategy but fail to achieve any and therefore do not stand out
• Why would a company not want to be stuck in the middle?

  can’t gain a competitive advantage
• How can stuck in the middle strategy be still successful?

  If competitors are also stuck in the middle

  Okay if it’s profitable
• Example of a company using the stuck in the middle strategy?

  Morrisons