The Five Generic Competitive Strategies

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The Five Generic Competitive Strategies
Chapter 5 – Assurance of Learning Exercise, Competitive Strength Assessment Chart, Five-Forces Model & Case 4

Strategic Management – MBA 5900
The Five Generic Competitive Strategies
Chapter 5 – Assurance of Learning Exercise, Competitive Strength Assessment Chart, Five-Forces Model & Case 4

The Five Generic Competitive Strategies
“The company boast on its advertisements that its products are rated number one by consumer magazines and are not sold at Lowe’s or Home Depot” “The company boast on its advertisements that its products are rated number one by consumer magazines and are not sold at Lowe’s or Home Depot” Chapter 5 – Assurance of Learning Exercise, Competitive Strength Assessment Chart, Five-Forces Model & Case 4 1. Best Buy’s competitive strategy should be classified as a differentiation strategy. This is based on its differentiating features, such as its in-store demonstration models of PC monitors, MP3 players and other electronics. Also, the incorporation of Geek Squad, which is a unique technical support and installation service department that Best Buy use to market to its customer base. If customers value these additional features, Best Buy will gain buyer loyalty to its brand and will gain a competitive edge.

2. Stihl’s contribute to its differentiation strategy by using market emphasis; which according to the textbook is when a company charges a premium price to cover the extra cost of differentiating features. In addition, Stihl uses a varied product line where it focuses on chain saws, leaf blowers, and hedge trimmers. The company takes pride in its basis of competitive strategy by offering customers the ability to purchase something different and exclusive.

3. The BMWgroup relies on its company resources such as the BMWgroup engineer’s expertise, the executive team’s innovation strategies, and the consumer to gain a competitive advantage in the car industry. Based on this expertise the company becomes capable of creating value added activities such as connected driver, where a person is able to make outside phone calls in case of an emergency. Or where consumers are able to download information from GOOGLE maps and send it directly to the vehicle’s GPS system. Moreover, BMW has created a way for consumers to have Bluetooth capabilities while driving. These added benefits are considered bundling and are appealing to BMW’s exclusive clientele. BMW prides itself on being energy efficient while having a clear vision for the future. All of these features contribute to the differentiating strategy and BMW’s unique position in the car industry.

Competitive Strength Assessment
Costco Sam’s Club BJ’s KSF/ StrengthAssessment| Importance Weight| Strength Rating| Weighted Score| Strength Rating| Weighted Score| Strength Rating| Weighted Score| Quality/Product PerformanceReputation/ImageManufacturing capabilityTechnological skillsDealer network distributor capabilityNew Product and Innovation CapabilityFinancial ResourcesRelative Cost Position Customer Service CapabilitiesSum of Importance WeightsOverall weighted competitive strength rating| 0.100.100.100.050.050.050.100.300.15| 109859391010| 1.00.9.8.25.45.15.93.001.5| 91094103888| .91.00.9.2.5.15.82.41.2| 88109886510| .8.81.00.9.4.4.61.51.5| | 1.00| | | | | | |

| | | 8.95| | 7.15| | 7.1|
| |

Based on Case 4, this conclusion was made for Sam’s Club, Costco, and BJ’s.

* Costco has a high weighted competitive strength rating, which signals its strong competitive advantage in the industry

* Sam’s Club comes in second place with a score of 7.15. This gives it a less competitive advantage than its rival Costco.

* BJ’s came in last place with a score slightly lower than Sam’s Club. The score was 7.1. The difference between this score and that of Costco’s shows...
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