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0:00
Welcome back to Part 2 of
Strategy planning for
a competitive edge.
0:07
To this point in our review of
the fundamentals of the
strategic planning process,
we have discussed the importance
of vision and mission,
walked through the
process of conducting
an external analysis
of your environment
to identify opportunities
and threats,
and reviewed a method
for conducting
an internal analysis
of your business
to identify strengths
and weaknesses.
Now we're ready to discuss
strategy development and
competitive positioning.
0:35
Your strategy describes
your competitive game plan.
How you're going to position
your company in the
marketplace to gain
a sustainable
competitive advantage
that will allow you to
earn above-average rates
of return on your investment.
In this section, we will look
at a simple model
for thinking about
your strategic
options and examine
some fundamental
principles for developing
a distinctive
strategic position.
The goal is to construct
a clear strategy that
everyone in your business
can understand, internalize,
and use as a framework
for decision-making
in pursuit of your mission.
1:12
At the simplest level,
two decision elements
describe a firm's strategy.
One, the basis for
competitive advantage,
and two, the scope of
the target market.
Our goal is to
focus our strategy
through the lens of these
two basic elements.
A company can obtain a
competitive advantage either
through low price or uniqueness
in product or service,
and can seek to
compete either in
a broad or narrow market in
terms of target customers.
The decision process results in
four basic alternative strategic
positions within an industry.
These positions are
broad price leadership,
focused price leadership,
broad differentiation, and
focused differentiation.
As you can see, each of these
four alternative strategies
involves a fundamentally
different approach
to strategic positioning.
Let's look briefly at each.
