Competitive strategy


The role of strategy is to define and communicate a company’s unique position, and says it should determine how organizational resources, capabilities and competencies should be combined to create competitive advantage.

There are two approaches for placement:

  1. Cost Leader
    Realizes in retruns with favorable prices, due to extreme efficient cost structures.
  2. Benefit Leader
    Provides real values to customers, tributed by customers by higher prices.

Anything – considerably outside these approaches – are inside a swamp of comparability and interchangeability. This swamp is also though due to missing real competitive advantages. It’s harder to move out of this position as you’re one out of many.

Strategy Types

Considering stated approaches, there are two sectors for evaluation as part of corporate strategies:

  1. Champions of attractiveness
    • by differentiation (benefits)
    • by cost leadership
  2. Swamp of interchangeability

As this article is about building up a position of strength, we’ll dive deeper on ①. Enterprises moving as champions can be drilled into 5 different segments:

Each segment contains one or multiple roles, which describes position an enterprise has and where it wants to be on the market:

  1. Disruption
    • Researcher
      Portfolio management to manage opportunities and risks.
    • Simplifier
      Cost and benefit leader from the startCost and benefit leader from the start.
  2. Differenciation
    • Inventor
      Innovations serve or create needs.
    • Vendor
      acquires and convinces customers.
  3. Dominance
    • Cost Leader
      Radical Cost Structures Bring Advantages.
    • Market Leader (Eco-System)
      Market shares bring advantages.
  4. Dilema
    • Savior
      achieves high prices with “normal” services due to special needs.
  5. Diversification
    • Conquerer
      Entry into new markets with existing or new products.
    • Integrator
      Integration of sales and production (vertical diversification).
    • Conglomerate
      Portfolio management to control opportunities and risks.