作者:Valeria García Ramírez 4 年以前
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Competitive risks of the Differentiation/Cost Leadership Strategy
Firms that fail to perform the primary and support activities in an optimum manner become stuck in the middle meaning that the firm´s structure is not low enough to allow it to attractively price its products and that its products are not sufficiently differentiated to create value for the target customer.
Firms can also become stuck in the middle when they fail to successfully implement either the cost leadership or the differentiation strategy.
The first risk is that a competitors may be able to focus on a more narrowly defined competitive segment and outfocus the focuser.
A second risk is that a company competing on a wide-base industry may decide that the market segment served by the focus strategy firm is attractive and worthy of a competitive persuit.
The third risk is that the needs of the customer within a narrow competitive segment become more similar to those of industry wide customers as a whole.
Competitive risks of the Differentiation Strategy
One risk is that customers might decide that the price differentatior´s product and the cost leader´s product too large.
Another risk of the differentiation strategy is that a firm’s means of differentiation may cease to provide value for which customers are willing to pay.
A third risk of differentiation is that experience can narrow customer´s perception value of a product´s differentiated features.
Competitive risks of the Cost Leadership strategy
One risk is that the process used by the cost leader to produce and distribute its good or service can become obsolete in the future because of conpetitor´s innovation.
A second risk is that too much focus by the cost leader on cost reductions may occur at the expense of trying to understand customers’ perception of competitives levels of differentiation.
The third risk is imitation
Firms use core competencies to implement value-creating strategies and thereby satisfying the customer´s needs.
After the firm decides who to serve, it needs to figure out what the group needs.
The customers must be divided in groups using market segmentation
Richness
The other dimension that is richness is concerned with the depth and detail of the two way flow of information between the firm and the customer.
Affiliation
Affiliation is the third dimension we see is concerned in facilitating useful interactions with customers.
Reach, Richness and Affilation
Reach, this part is concerned with the firms ability to connect and acces the customer or client. The other dimension that is richness is concerned with the depth and detail of the two way flow of information between the firm and the customer.