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desires, wants, or cravings that can be satisfied by means of the attributes or characteristics of a product
customer needs
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process of designing products to satisfy customers' needs
product differentiation
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choosing a set of business-level strategies that work together to give a company a competitive advantage over its rivals
competitive positioning
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a price that offers customers as much or more value than the product of its rivals
competitive price
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sets of people who share a similar need for a particular product
customer groups
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the way a company decides to group customers, based on important differences in their needs or preferences, to gain a competitive advantage
market segmentation
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a product is targeted at the "average customer", minimum customer responsiveness, competitive advantage is achieved through low price, not differentiation
no market segmentation
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a different producgt is offered to each market segment, customer responsiveness is high, competitive advantage achieved through differentiation, not low price
high market segmentation
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targets and develops products for just one or two market segments, competitive advantage can be achieved through either low price or differentiation
focused market segmentation
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the maximum amount of value that the products of different companies in an industry can provide to customers at any one time using the different business models
value creation frontier
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gives a company a specific form of competitive position and advantage vis-a-vis its rivals that results in above average profitability
generic business-level strategy
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a company does everything possible to lower its cost structure so it can make and sell goods or services at a lower cost than its competitiors
cost-leadership
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business model based on combining the cost leadership and focused business-level strategies to compete for customers in just one or a few market segments
focused cost-leadership strategy
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business model pursues business-level strategies that allow it to create a unique product, one that customers perceive as different or distinct in some important way
differentiation
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combines differentiation and focused generic business-level strategies and specializes in making distinctive products for one or two market segments
focused differentiation
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companies that have developed business-level strategies to better differentiate their products and lower their cost structures simultaneously
broad differentiators
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the set of companies that pursue a similar business model
strategic groups
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The value creation frontier can be reached by choosing among four generic competitive strategies:
- cost leadership
- focused cost leadership
- differentiation
- focused differentiation
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