Strategic Management Strategies

Strategic Management Strategies

The Strategy Clock

One of the strategies which has not gained much awareness or fame and is used rather less than compared to the other ones. This strategy has a standard base that seeks accomplishment by providing customers what they want or need, better than what their competitors are offering. The strategy clock adopts the supposition that customers will recognize any offering based on 'apparent value-for-money' (Porter, 1980). The clock is based on different observation of the service/product contributing against a price line. This results in some general strategic alternatives based on the positioning on the clock. Each of these eight diverse points is now discussed:

No frills

This collectively combines a low price, low perceived advantage and concentrates on a price-sensitive market segment. Such goods tend to be commodity-like, and consumers do not distinguish or value distinction in the offerings from different suppliers. There may be price-sensitive consumers who cannot afford better-quality products, and purchasers have low switching cost, and high power. Building customer loyalty and customer retention is tricky, so providers try to 'buy' reliability in other ways. It may also be a valuable strategy where smaller contestants keep away from the major competitors, who may well be challenging on non-price strategies (Porter, 1980).

Low price

Corporations competing here are looking for to attain a lower price than competitors while trying to uphold similar apparent benefits to those obtainable by competitors. To succeed here, a company needs to recognize and focus on a marketplace sector which is not appealing to competitors or, with more complexity, struggle on price. The key confront is to reduce costs which others cannot reproduce or match, resulting in a sustainable advantage (Porter, 1980).

Hybrid

This scheme seeks to collectively achieve differentiation, and a value lower than that of competitors. The accomplishment or otherwise of this strategy relies on the ability to convey improved benefits to consumers together with lower prices while achieving enough margins for reinvestment to manage, maintain and construct the bases of differentiation (Porter, 1980).

Differentiation

This strategy marks in contributions that offer benefits different from those of competitors and that are widely appreciated by purchaser. The aim is to accomplish competitive gain by offering better services or products at the same value or by enhancing limits by somewhat higher pricing.

Focused differentiation

This strategy looks to provide greater perceived benefits, proving a significant price premium, typically to a niche marketplace.

Increased price/standard value

This is a Letdown strategy or a strategy that will lead to failure, greater limits if competitors do not follow and there is possibility of losing market share.

Increased price/low value

Another letdown strategy, only reasonable in a case of pure domination where monopoly could be made.

Low value/standard price

A crash strategy is a strategy that explains loss of market share.

The Value Chain

The activities and actions of a business are described by value chain and then connect them to the competitive position of the firm. Porter distinguishes:

Primary activities

Marketing and sales, inbound logistics, outbound logistics, operations, service in the core value chain producing direct value

Support activities

HR management, technology ...