Chapter 5: The Five Generic Competitive Strategies

A collection of flashcards focused on key vocabulary terms and definitions related to competitive strategies in business, based on the provided lecture notes.

Five Generic Competitive Strategies

A framework for crafting and executing competitive strategies based on cost leadership, differentiation, or focus.

Competitive Advantage

The attributes that allow a company to outperform its rivals, which can be achieved through cost leadership or differentiation.

Broad Low-Cost Strategy

A strategy aiming to achieve the lowest overall costs compared to rivals while attracting a broad customer base.

Broad Differentiation Strategy

A strategy seeking to differentiate products from competitors to appeal to a broad spectrum of buyers.

Focused Low-Cost Strategy

A strategy that targets a narrow market segment while providing lower costs than rivals.

Focused Differentiation Strategy

A strategy offering customized qualities that cater to the specific desires of a narrow market niche.

Best-Cost Strategy

A hybrid approach that combines low-cost production with the attributes of high-quality differentiation.

Value Chain Activities

A range of activities that a company engages in to deliver its value proposition to customers; impacts overall cost structure.

Cost Driver

A factor strongly influencing a firm's costs, which can be either asset-based or activity-based.

Economies of Scale

Cost advantages that a business obtains due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Differentiation Attributes

Product features that appeal to buyer needs and create sustainably distinct value compared to competing products.

Market Niche

A specialized segment of the market for a specific kind of product or service, which is usually less competitive.

Sustainable Differentiation

Differentiation that is difficult for competitors to replicate, often due to unique company resources or capabilities.

Competitive Conditions

The specific context within which businesses operate, affecting their strategies and market positioning.

Customer Value Proposition

The value a company promises to deliver to its customers, which is enhanced through strategic management of the value chain.