Competitive strategies: 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 a focus strategy. A mixture of two or more of these strategies is also possible depending on your business' objectives and current market position.
Cost leadership: The aim of this strategy is to
be a low-cost producer relative to your competitors and is particularly useful
in markets where price is a deciding factor. Cost leadership is often achieved
by carefully selecting suppliers and production techniques to minimize
production, distribution and marketing costs. However you need to be aware of
any serious loss in quality that may render low cost ineffective.
Differentiation: A differentiation strategy seeks
to develop a competitive advantage through supplying and marketing a product
that is in some way different to what the competition is doing. If developed
successfully this strategy can potentially reduce price sensitivity and improve
brand loyalty from customers.
Focus strategy: This strategy recognizes that
marketing to a homogenous customer group may not be that effective a strategy
for the product the business is selling. Instead the business focuses its
marketing efforts on a different selected market segments. That is, identify
the needs, wants and interests of the particular market segments and customize
marketing techniques to reflect those characteristics.