Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 1K views

    Brand Differentiation - PPT 01

    Uploaded by

    Nooruzzaman Mohammed
    The strategic management process involves three key steps: 1) developing a business-level strategy such as differentiation or low cost, 2) choosing bases of differentiation that create value for customers, and 3) properly implementing the differentiation strategy so the firm can exploit any competitive advantages. Differentiation aims to increase customer preference through unique product attributes, relationships, or firm linkages, but must be implemented well to sustain an advantage over competitors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd

    Brand Differentiation - PPT 01

    Uploaded by

    Nooruzzaman Mohammed
    1K views20 pages
    The strategic management process involves three key steps: 1) developing a business-level strategy such as differentiation or low cost, 2) choosing bases of differentiation that create value for customers, and 3) properly implementing the differentiation strategy so the firm can exploit any competitive advantages. Differentiation aims to increase customer preference through unique product attributes, relationships, or firm linkages, but must be implemented well to sustain an advantage over competitors.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The strategic management process involves three key steps: 1) developing a business-level strategy such as differentiation or low cost, 2) choosing bases of differentiation that create value for customers, and 3) properly implementing the differentiation strategy so the firm can exploit any competitive advantages. Differentiation aims to increase customer preference through unique product attributes, relationships, or firm linkages, but must be implemented well to sustain an advantage over competitors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    1K views20 pages

    Brand Differentiation - PPT 01

    Uploaded by

    Nooruzzaman Mohammed
    The strategic management process involves three key steps: 1) developing a business-level strategy such as differentiation or low cost, 2) choosing bases of differentiation that create value for customers, and 3) properly implementing the differentiation strategy so the firm can exploit any competitive advantages. Differentiation aims to increase customer preference through unique product attributes, relationships, or firm linkages, but must be implemented well to sustain an advantage over competitors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 20

    The Strategic Management Process

    
    

    
    
     
    
     
    
     
     
     
      
    
      
    

    
    
    

      
     
    
    
     
    
    
     
    !
    
    % 
    "!


     
    $
    
     #
    $
    m
    Business-Level Strategies

    Two Generic Business Level Strategies:

    Ô 

     generate economic value by having lower costs than competitors

    Example: Asda ƛ online grocery store UK


      
    
    
    
     generate economic value by offering a product that customers
    prefer over competitorsƞ product

    Example: Waitrose ƛ online grocery store


    
    Differentiation ƛ A Definition

    Definition:
    Product (or Service) differentiation is a business
    level strategy intended to:

     increase the perceived value of firmƞs products (or


    services) compared to competitorƞs products (or
    services)

     create a customer preference for firmƞs


    products / services

    G
    Bases of Differentiation

    › base of differentiation must fill some


    customer need:

    ƥ image ƥ beauty ƥ safety ƥ furthering a cause


    ƥ hunger ƥ status ƥ quality ƥ reliability in use
    ƥ comfort ƥ style ƥ service ƥ nostalgia
    ƥ cleanliness ƥ taste ƥ accuracy ƥ belonging

    › differentiated product fills one or more needs


    better than the products of competitors
    Œ
    Bases of Differentiation

    ›lmost anything can be a base of differentiation


    ƥ the wide range of customer needs can be filled
    by a wide range of bases of differentiation

    ƥ 
      (product features, location, etc.)
    ƥ
    
       (reputation, a cause, an ideal, etc.)
    ƥ limited only by managerial creativity

    Example: Mercedes vs. BMW

    Ñ
    Three Bases of Differentiation

     diff. kinds of Bases of Differentiation (BoD):

    1)
      
     

    ƥ exploiting the actual product

    m) 
    Ô  
    
    

    ƥ exploiting relationships with customers

    ) 
    
    

    ƥ exploiting relationships within the firm


    and/or relationships with other firms

    
    BoD 1: Product ›ttributes

    ƥ
       ë e.g. the shape of the product

    ƥ
      Ô  
    ë e.g. multiple functions on mobile phone

    ƥ 
    
       
    ë being the first to market, e.g. Sonyƞs
    Walkman

    ƥ  
    ë e.g. restaurant located next to a motorway exit

    r
    BoD m: Firm-Customer Relationships

     Ô  
    
    ë creating a unique product for a customer
    e.g. custom-tailored suit, custom-made bike (Bianchi)

     Ô  
    ë creating brand loyalty
    e.g. strong advertising (Coke, Nike)

      
    ë creating reputation for brand
    e.g. sponsoring events (Red Bull ›ir Race)

    ‰
    BoD : Firm-Linkages (1)

     
       
    
        to exploit certain
    resources
    e.g. skills, for example Ɲengineered by Lotusƞ Protons

     
    
         
     to exploit certain resources
    e.g. reputation, for example Porsche Design products

    
      
     offering extended product mix to attract customers
    e.g. a coffee shop selling food

    -
    BoD : Firm-Linkages (m)
     
    
     
    Ô 
    selling own products / services via new distribution channels
    e.g. groceries at service stations, music CDs and newspapers at coffee
    shops

     a!
    a 
    offering better services and customer support to supplement the sold
    product
    e.g. IBM servers

    --
    Competitive ›dvantage

       
    
    
      "# 
    
    $

    Is it "aluable?

    Is it are?

    Is it costly to mitate?

    Is the firm #rganized to exploit it?

    $
    
    
        
    
    !!%

    -m
    à " : Does differentiation result in an increase in revenues?
    à customers willing to pay premium?
    à higher sales of product?

    à 
    : By definition, we can assume rareness (if product /
    service is truly differentiated, then it is, by definition, rare ë but
    do consumers value it?)

    à 
    
    
    : How easy/costly would it be for competitors to
    imitate the differentiating factor?

    -
    Imitability of Differentiation

    Logic of costs of imitation


    ƥ if would-be imitators face a cost disadvantage of imitation, they will
    rationally choose not to imitate

    Substitutes
    ƥ if a base of differentiation is valuable, others will attempt to imitate
    it through duplication and/or substitution

    ƥ if no substitutes are obvious, then we would conclude that imitation


    through substitution will be costly ë at least for the present time

    -G
    Exploiting Industry-type Opportunities

    Fragmented Industry

    Branding: commodity &&


    
    

    Example: Kelloggƞs Corn Flakes

    Emerging Industry

    First mover advantages: captures market share

    Example: Motorola Mobile Phones

    -Œ
    Exploiting Industry-type Opportunities

    Mature Industry

    Refining product or adding services

    Example: IBMƞs emphasis on service

    Declining Industry

    Exploiting niches: serving those with strong


    needs/preferences

    Example: production of analogue films

    -Ñ
    Exploiting Other Opportunities

    Trends or Fads Social Causes


    ƥ spinners ƥ themed credit cards
    ƥ surf clothing ƥ animal safe clothing

    Government Policy Economic Conditions


    ƥ Toyota Prius ƥ outplacement agencies
    ƥ airport x-ray machines ƥ check cashing services
    -
    Implementing Differentiation
    Internationally
    Global Multi-Domestic

    ƥ standardized product ƥ non-standard product

    ƥ little variance in ƥ high variance in


    tastes & preferences tastes & preferences
    ƥ centralized control ƥ decentralized control
    ƥ focused on efficiency ƥ focused on satisfying
    tastes & preferences
    Example: Sony Example: Siemens
    -r
    Summary (1)

    ƥ product differentiation creates customer preferences

    ƥ preferences allow firms to make above normal profits

    ƥ almost anything can be a base of differentiation

    ƥ bases of product differentiation that meet the


    VRIO criteria may generate competitive advantage
    ƥ a product differentiation strategy is only as good
    as its implementation

    -‰
    Summary (m)
    Business Level Strategy

    Ô 

      
    
    
    

    Cost ›dvantages
    Competitive ›dvantage
    Depends on Meeting
    VRIO Criteria
    Based on:
    Economies of Scale
    Learning Curve Economies Emphasis on
    Technology Organization
    Policy Choices (Implementation)

    You might also like