1 thought on “Types of product competition strategy”
John
The choice of product competitive strategy is a complex process. Western corporate management theory provides the classification of product competition strategies. The product competition strategy is usually divided into three categories: The first category is low -cost strategy, also known as total cost leading strategy. This content is based on expanding production scale, by reducing product costs, strengthening cost management, strictly controlling costs, obtaining revenue higher than the general level of the same industry, and making the product's low price advantage, quickly and quickly Expand market share. The low -cost strategy is generally based on the scale economy. It can obtain excess profits, or take the strategy of lowering the price while reducing costs to attract more consumers and achieve the effect of Yinluo. The disadvantage of low cost strategy is that the cost reduction is always limited. Especially when the investment and cost reaches the critical point, the cost of one unit will be reduced, and the investment of several units or dozens of units will be required. This puts forward new topics and tests for product producers to make product competition strategies. The second category is a differentiated strategy, also known as a unique strategy. This refers to highlighting the characteristics of enterprise in terms of products or services, and establishing unique products and corporate image, thereby forming its own fixed consumer group. Product production (operating) is not limited by cost and can directly obtain higher returns, while avoiding the threat of price competition and alternative producers. The disadvantage of the differential strategy is that it is impossible for enterprises to expand their market share at the same time, and the cost of product costs is high. The third category is a dedicated strategy. The strategy is based on market segmentation theory. On the basis of the entire market survey and analysis, find out the main target market of the company, which actually differentizes the market. The market segment is just the process of choosing the target market. Enterprises have entered the re -selected target market with existing products. This does not need to increase investment in cost and does not need to change the inherent quality of the product. The profit potential of the specialization strategy is great, and the target market is generally relatively stable. However, the disadvantage of the specialization strategy is that the relatively fixed target market has determined that the market share of the product is relatively small. The implementation method of defense and offensive strategies can also be divided into defensive and offensive strategies in the implementation method because of the above three specific product competition strategies. The defensive strategy refers to the basis for enterprises to adapt to the external environment as the basis, to negatively adapt to the environment, and maintain the product structure and production volume based on the existing scale. The offensive strategy is that the enterprise is not passively restrained and faced with the environment, but actively attacked to create and develop a new environment. The two methods and three types of strategies can be arranged into a multi -product competitive strategy.
The choice of product competitive strategy is a complex process. Western corporate management theory provides the classification of product competition strategies.
The product competition strategy is usually divided into three categories:
The first category is low -cost strategy, also known as total cost leading strategy.
This content is based on expanding production scale, by reducing product costs, strengthening cost management, strictly controlling costs, obtaining revenue higher than the general level of the same industry, and making the product's low price advantage, quickly and quickly Expand market share. The low -cost strategy is generally based on the scale economy. It can obtain excess profits, or take the strategy of lowering the price while reducing costs to attract more consumers and achieve the effect of Yinluo. The disadvantage of low cost strategy is that the cost reduction is always limited. Especially when the investment and cost reaches the critical point, the cost of one unit will be reduced, and the investment of several units or dozens of units will be required. This puts forward new topics and tests for product producers to make product competition strategies.
The second category is a differentiated strategy, also known as a unique strategy.
This refers to highlighting the characteristics of enterprise in terms of products or services, and establishing unique products and corporate image, thereby forming its own fixed consumer group. Product production (operating) is not limited by cost and can directly obtain higher returns, while avoiding the threat of price competition and alternative producers. The disadvantage of the differential strategy is that it is impossible for enterprises to expand their market share at the same time, and the cost of product costs is high.
The third category is a dedicated strategy.
The strategy is based on market segmentation theory. On the basis of the entire market survey and analysis, find out the main target market of the company, which actually differentizes the market. The market segment is just the process of choosing the target market. Enterprises have entered the re -selected target market with existing products. This does not need to increase investment in cost and does not need to change the inherent quality of the product. The profit potential of the specialization strategy is great, and the target market is generally relatively stable. However, the disadvantage of the specialization strategy is that the relatively fixed target market has determined that the market share of the product is relatively small.
The implementation method of defense and offensive strategies can also be divided into defensive and offensive strategies in the implementation method because of the above three specific product competition strategies. The defensive strategy refers to the basis for enterprises to adapt to the external environment as the basis, to negatively adapt to the environment, and maintain the product structure and production volume based on the existing scale. The offensive strategy is that the enterprise is not passively restrained and faced with the environment, but actively attacked to create and develop a new environment. The two methods and three types of strategies can be arranged into a multi -product competitive strategy.