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Paper代写:Market Competition Strategy

2017-08-09 | 来源:51due教员组 | 类别:Paper代写范文

下面为大家整理一篇优秀的paper代写范文- Market Competition Strategy,供大家参考学习,这篇论文讨论了市场竞争策略。对于企业的发展来说,一个正确的市场竞争策略是非常关键的。而一个正确的市场竞争策略,首先要做的就是减少成本,然后创建自己的独特的产品或服务,最后再了解消费者的差异,争取获得更多的市场。

Market Competition Strategy,市场竞争策略,论文代写,essay代写,paper代写

These three approaches are called "generic strategies", because they can be applied to products or services in all industries, and to organizations of all sizes. Porter's generic strategies are in fact ways of gaining competitive advantage by developing the "edge" that drives up sales and increase market share.

Cost Leadership

The first generic strategy is cost leadership where a firm organises its value adding activities so as to be the lowest cost producer of a product or service in its industry. Under this strategy products do not need to be special or different but instead the main attractiveness to the consumer is the price. Firms that focus on applying cost leadership must work to cut down on costs in all areas and in order to achieving Cost Leadership companies usually have to:

Combine and share resources already in-house

Invest massively in technology that will bring costs down

Implement efficient logistics, processes and make wise outsourcing decisions

Lower cost base (labour, materials, facilities), and sustainably cutting costs below those of other competitors

The Cost Leadership strategy involves being the leader in terms of cost in the industry or market. Simply being amongst the lowest-cost producers may not be enough, as it leaves the company open to attack by other low cost producers who may undercut prices and therefore block attempts to increase market share.

There are two main ways of achieving competitive advantage within a Cost Leadership strategy:

Increasing profits by reducing costs, while still charging normal prices, represented by P1 in Figure 1.

Increasing market share through charging lower prices, while making a reasonable profit through economies of scale, represented by P2 in Figure 1.

Competitive advantage through cost leadership

On good example of a successful cost leader is Wal-Mart. Sam Walton the founder of Wal-Mart has been very successful in cutting the cost, achieving the cost leader position. He was able to do so by adapting the IT system for the inventory of Wal-Mart stores and saved the company millions of dollars and times spent on the inventory process. Wal-Mart also has one of the most optimised distribution centres where trucks can make a maximum utilisation of them.

The greatest risk in pursuing a Cost Leadership strategy is that these sources of cost reduction are not unique, and other competitors can easily copy the cost reduction strategies. This is why it's important to continuously find ways of reducing every cost and develop an advantage that is not easily copied by others.

Finally, the common trap that firms usually fall into is that they become so concerned about maintaining low costs that research and development or marketing are overlooked, yet these are expenses the firm may need to incur in order to remain competitive.

The second strategy proposed by Porter is differentiation, which emphasises on the creation of unique product or service which increases its attractiveness vis-à-vis the competitors’ products. Differentiation is based upon organising value chain activities in such a way as to create differentiated products or services based on what the customers’ value such as design, performance, after sales service distribution channels and also brand image.

This strategy can only be implemented with the involvement of highly paid scientists and designers as well as the strong coordination of the research and development and marketing functions of the company. Success in this strategy would include higher profits and customer loyalty, on the other side a company employing a differentiation strategy, there would be extra costs that the company would have to incur. Such extra costs may include high advertising spending to promote a differentiated brand image for the product, which in fact can be considered as a cost and an investment.

In order to sustain this strategy companies should continuously develop differentiated products that match customer’s needs and preferences along trends, and in order to reach that, a company must monitor constantly its customers trying to identify their preferences and understand their behaviour, until the point of predicting how they can react to certain product changes.

To make a success of a generic differentiation strategy, organizations need:

Good research, development and innovation.

The ability to deliver high-quality products or services.

Effective sales and marketing, so that the market understands the benefits offered by the differentiated offerings.

On the other hand it is sometimes difficult for firms to estimate if the extra costs entailed in differentiation can actually be recovered from the customer through premium pricing. Moreover, successful differentiation strategy of a firm may attract competitors to enter the company’s market segment and copy the differentiated product.

Some companies like BMW and Mercedes employ differentiation strategies, organising their value adding activities so as to create modern design, high technology, high quality products which command premium prices. On the other hand McDonalds, for example, is differentiated by its very brand name and brand images of Big Mac and Ronald McDonald.

The third generic strategy is focus, which plays on the differences in consumers in the market, not specific products. Focus strategies are aimed at meeting the distinct preferences of a large group, or defining a product to better serve a larger group of consumers, even though the market share may be smaller. Success is found when consumers are drawn in and retained, and competitors do not copy the strategy.

To run a focus strategy a company must have a selective offering provided to selective markets, every process must be focus oriented, in both meeting the market segment needs and doing it with lower costs than the average of its competitors. After what a company will direct its efforts headed for a specific group whose specific needs were not satisfied for companies with the broader scope of differentiation. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors.

According to Porter, for a successful implementation of a focus strategy the market must be a big one and expect to growth dramatically. And have for a company too much different segments in which it can focuses on or represent the impossibility to go to the broader perspective, because this are facts creating tradeoffs, and so barriers to imitation.

Porter initially presented focus as one of the three generic strategies, but later identified focus as a moderator of the two strategies. Companies employ this strategy by focusing on the areas in a market where there is the least amount of competition (Pearson, 1999). The company can make use of the cost leadership or differentiation approach with regard to the focus strategy. In that, a company using the cost focus approach would aim for a cost advantage in its target segment only. If a company is using the differentiation focus approach, it would aim for differentiation in its target segment only, and not the overall market.

The downfalls can include losing consumers due to preference changes, and losing business in the broader market. The focus on costs can also be difficult in industries where economies of scale play an important role. There is the evident danger that the niche may disappear over time, as the business environment and customer preferences change over time. Another risk is the fact that new comers would easily saturate the market that would bring about all the already known consequences.

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