CIMA P3 Syllabus B. Strategic risk - Porter’s generic strategies - Notes ^{9 / 13}

This deals with HOW to change your competitive edge and gives 3 possible options:

• Cost Leadership

  This means being the cheapest across the range of products and can be achieved through:

  1. Cheapest suppliers

  2. Economies of Scale

  3. Technology use

• The problem here is that only 1 company can be the cost leader and this is very difficult to continually achieve and maintain threshold competencies

• Differentiate your Product

  This can be achieved through:

  1. Brand building

  2. More features

  3. Less features (but great usability)

  4. Ease of ordering

• The problem here is that companies copy and become even better very quickly

• Focus on a niche area

  This is where you concentrate on one particular market segment and focus all your activities upon them. 

  You become very well known in that area, and are the natural “goto” choice.

  The problem here is that growth beyond this niche is difficult