The Five generic competitive strategies and Mini case of Tata Motors Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

The Five generic competitive strategies and Mini case of Tata Motors Case Solution

Competitive Strategy

A long term business plan or action plan which a company makes to achieve its mission and vision is referred to as strategy and when a company incorporates factors in this action plan as per the external factors and competition is referred to as competitive strategy.

Introduction

Michael Porter introduced two competitive strategies which a firm can carry to compete with its rivals. The two strategies include “Low Cost Leadership and differentiation”. Furthermore, these two strategies are sub divided into one more category known as the Best Cost Strategy. However, when a firm uses these two strategies for a broader section, it will be defined as broad Differentiation or overall low cost. On the other hand, if a company uses it for a narrower section, then it will be defined as the Focus Differentiation or Focus Low cost strategies. This is the reason these strategies are known as the five generic competitive strategies. (mcgrath, 2002)

In addition to this, these strategies differ from company to company and as per the need of the company and competitive environment. In the next section the analyst will try to answer all the possible questions which can be raised for the purpose and uses of these strategies. Before going towards the details of these strategies let’s have a closer look towards these strategies since, they are as follows.

Differentiation (Broad Segment)
Low Cost Strategy (Broad Segment)
Best Cost Strategy (Hybrid of the above strategies)
Focus Low Cost (Narrow Segment)
Focus Differentiation (Narrow Segment)

Overall Low Cost Provider

This strategy is the most useful and helpful strategy in those are as where the buyer is highly price sensitive and willing to spend less on the specific industry’s offering. On the other hand,the other reason which makes this strategy a bit more powerful is the similar needs of the buyer and their same way to use the specific product and service of the industry.(tanwar, 2013)

Low Cost Strategy a powerful tool to compete in the Price Sensitive industry

Under this strategy, a company tries to achieve the low cost leadership among its industry peers to increase its sales. However, this should kept in mind that sales will be increased indirectly while reducing per unit profit and increasing the sales volume. This indirect approach increases the profit for any company. Furthermore, one more thing which should be reminded while crafting this strategy is that there will be only a single cost leader in the industry while the other will be struggles and runner ups.

As far as the question is concerned that how the low cost provider will earn more profit, then the answer suggests that this strategy will allow the company to have low cost as compared to its rivals. Under this strategy the firm will focus to incorporate only minimum acceptable quality and will only add basic features to the product which will reduce its cost. Moreover, this strategy is specially designed for arena where the competition is purely based on price not on the quality of the product or service.(collins, 1985)

Effective Low Cost Approach

The firm can achieve low cost leadership by performing those cost saving activities which are inimitable for rivals or by finding those ways to lower the cost which are not readily available for rivals. In addition, the company can also achieve this by maintaining the minimum acceptable quality in lower cost. Furthermore, there are few more ways to achieve low cost leadership in a way that cannot be readily matched which are as follows.(chakarbati, 2011)

Cost Cutting Methods
Revamping the Value chain
Identify the cost drivers..................... This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution