You will prepare and submit a term paper on The Importance of Competitive Strategies in Business.
Your paper should be a minimum of 2250 words in length. Competitive strategies will also involve the reallocation of resources to various sectors within their business in order to improve the company’s long term capabilities and marker position. Employment of tactical strategies can also evident in countering the market conditions existing at any given time (Thompson, 2003, p65). According to Porter (1979), there are five forces that determine the competitive advantage capacity and therefore attracting more customers in the market than their rivals. There are two fundamentals of competitive advantage that a company can adopt and they are either low cost or differentiation. Together with the scope of activities for which a business wishes to achieve, it leads to three basic strategies for achieving a performance that is above average.
These three include cost leadership, differentiation, and focus which comprises two variables namely. the differential focus and the cost focus. In cost leadership, the company will produce the cheapest products in the market either aiming at economies of scale, preference in raw material acquisition, the best technology among other factors. The manager must, therefore, exploit all the sources of cost advantage and once it attains cost leadership, then it becomes apparent that the firm can command the prices provided that the prices are within the industry average. Such a firm can be said to be successful and to have a competitive advantage over its rivals.
However, the low price should not compromise the value of the product but the firm should ensure a similar quality of the service or product as their rivals (Thompson, 2003). In achieving cost leadership, the firm may employ the advantage of economies of scale. Economies of scale are the benefits enjoyed by expanding the scale of production in a long period. This has the effects of reducing the long-run average costs on various products. . .