Microeconomics

Competitive strategies in the market economy

Microeconomics

On the threshold of XXI century, companies that do not have a clear vision of how to be different and unique, will be devoured by competition

Offensive or defensive actions to create a defendable position in an industry, to successfully face the five competitive forces and thus get a higher return on investment for the company

Michael Parter.

Index

Microeconomics
What is?/ Competitive advantage..1 Competitive edge...2/3 Leadership total cost...3 Differentiation..4 Focus on differentiation..5 Conclusion6 Biography.7

What is?

Microeconomics
The term competitive strategy currently refers to how a company decides to compete in a market in response to the strategies and positions of their competitors in order to gain a sustainable competitive advantage. Competitive strategies are the method by which you achieve a competitive advantage in the market. There are typically three types of competitive strategies that can be implemented. They are cost leadership, differentiation and focus strategy. A mixture of two or more of these strategies is possible depending on the goals of your business and current market position.

Competitive advantage
It is an advantage that the company has in relation to its competitors.

To be truly effective, the advantage must be:

Single; Difficult mimic; Sustainable; Superior to competition.

How to reach?
Customer Focus; superior Quality; wide distribution; high brand equity and positive company reputation; production techniques low cost; management team and staff excellence.

1.

Microeconomics

Competitive edge
There is always competition, but there's always room for several companies in a given market; Essential is to define the corporate positioning and marketing form of competition to be adopted; Is important to predict and anticipate, rather than react to the market and competitors.

Choice of competitive strategy

The future entrepreneur before starting a business, you should opt for one of the competitive strategies, depending on the analysis of the forces that determine the competitive microenvironment of your business.

Generic competitive strategies

The objective of competitive strategy is to achieve competitive advantages in relation to competitors, the success factors or forces that determine the competitive, entrepreneurial controllable by future.

2.

Microeconomics
Combination of two generic competitive advantages benefit more by price and even greater benefit for lower price with the scope (size) of the business, defines the four generic competitive strategies: Leadership for lowest cost: Product or service cheaper than market; Lead for differentiation: Unique products or services on the market; Focusing on cost: Best price on a particular segment; Focus on differentiation: Better product given segment.

Leadership total cost

Cost leadership strategy is to get a low cost in relation to competitors. The lead costs can be achieved by approaches such as: Economies of scale of production, the experience curve effect; Strict cost control; Minimization of costs in areas such as research and development, service delivery, sales force or advertising.

One can cite as companies that adopt the strategy of low cost Bic (pens), Gol(airline). 3.

Microeconomics

Differentiation

Seeks to highlight your business in relation to competitors, in one or more success factors that are valued by customers. Your reward for competitive advantage created by differentiation, is able to charge more for their products or services than its competitors

Fashion boutiques- Need to stand out in the following success factors: Personalized service to customers; Exclusivity and timeliness in product line; Setting and location charming.

You find points that are value to customers and differentiate these aspects, with excellent and different from competition. Example Company Sony.

4.

Microeconomics

Focus on differentiation
You focus on a specific market segment, selecting a target audience and knowing it intimately. When selecting the target segment the company seeks to apply the cost leadership or differentiation. It is a positioning for a very specific niche. Examples of companies: Ferrari, Jaguar. Focus on strategy seeks to superiority in specialization, which can focus on a specific niche market, high expertise and knowledge of the client, with much attention to it. The expertise is valued.

Porter's generic competitive strategies.

5.

Microeconomics

Conclusion
We understand then that companies need to develop different strategies to enjoy the possibility of obtaining a "place in the sun". The competitive advantage of a company's value arises that can create for its buyers that exceeds the cost and manufacturing. Value is what buyers are willing to pay, other than cost, which is the only financial value. Many companies develop their strategies only with references on information obtained through previous experiences. The strategy of a company has to be drawn with an eye to the future, in other words for future prospects, where the company wants to be, how you want to reach and what need to do to get there. A strategy is only competitive if compared to its competitors sustainability over a long period of time. Has the lowest price that is differentiated.

6.

Microeconomics

Biography

http://www.slideshare.net/

7.

Microeconomics

Microeconomics