Competitive Strategy

Companies wishing to be leading-edge competitors in the world must be willing to implement some     

    or all of the following:

Cost Leadership Strategy
       Goal: offer products or services at the lowest cost in the industry.
       Challenge: earn a profit for the company as quickly as possible rather than operating at a loss
       and draining profitability from the involved market players.
       Example: Walmart features low prices on key items, of which customers are very price-
       conscious, and offers less aggressive discounts on other merchandise.

Differentiation Strategy
       Goal: provide products that stand out as clearly as possible from competitive offerings.
       Challenge: know the market well enough to be able to produce something new and competitive
       regularly
       Example:  USA Southwest Airlines promotes no-fee baggage handling as unique from other
       airlines.

Innovation Strategy
      Goal: leap over other market players by introducing completely new or notably better products or
      services.
      Challenge: Technology start-up companies often try to "disrupt" the existing marketplace and/or   
      make the current market entries obsolete with their own breakthrough product offerings. More
      established companies try to pursue this strategy despite their product offering having already
      achieved market acceptance.
      Example: Apple Inc. with its iPod personal music players and iPad tablet computers.

Operational Effectiveness Strategy
      Goal: perform internal business activities better than competitors
      Challenge: making the company easier or more pleasurable to do business with compared to   
      others.
      Example: State Farm Insurance promotes their agents as "good neighbors" who actively help    
      customers.

Technology-based Competitive Strategy (Project Socrates)
      Goal: do in-depth research to produce key findings that become the basis for understanding the
      competitive system and then create the support tools for developing and executing competitive
      strategies.
      Challenge: knowing who to target and what to research, accurate interpretation, resources to
      carry out the task
      Example:USA, during the Reagan Administration, had a team of experts led by Michael Sekora
      to 1) determine why US industries were losing their ability to compete in the world marketplace    
      and 2) develop a solution to restore the US ability to compete.