The objective of competitive strategy is to knock the socks off rival companies by doing a better job of providing what buyers are looking for.
A low-cost leader's basis for competitive advantage is lower overall costs than competitors. Successful low-cost leaders are exceptionally good at finding ways to drive costs out of their businesses.
Outperforming rivals in controlling the factors that drive costs is a very demanding managerial exercise.
Success in achieving a low-cost edge over rivals comes from exploring avenues for cost reduction and pressing for continuous cost reductions across all aspects of the company's value chain year after year.
A low cost provider is in the best position to win the business of price-sensitive buyers, set the floor on market price, and still earn a profit.
A low-cost provider's product offering must always contain enough attributes to be attractive to prospective buyers — low price, by itself, is not always appealing to buyers.
The essence of a broad differentiation strategy is to be unique in ways that are valuable to a wide range of customers.
Easy to copy differentiating features cannot produce sustainable competitive advantage.
A differentiator's basis for competitive advantage is either a product/service offering whose attributes differ significantly from the offering of rivals or a set of capabilities for delivering customer value that rivals do not have.
Any differentiating feature that works well tends to draw imitators.
Even though a focuser may be small, it still may have substantial, competitive strength be cause of the attractiveness of its product offering and its strong expertise and capabilities in meeting the needs and expectations of niche members.
Strategic alliances are collaborative arrangements where two or more companies join forces to achieve mutually beneficial strategic outcomes.
The best alliances are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit. They tend to enable a firm to build on its strengths and to learn.
The competitive attraction of alliances is in allowing companies to bundle competences and resources that are more valuable in a joint effort than when kept separate.
A vertical integration strategy has appeal only if it significantly strengthens a firm's competitive position.
Outsourcing involves farming out certain value chain activities to outside vendors.
A company should generally not perform any value chain activity internally that can be performed more efficiently or effectively by its outside business partners — the chief exception is when a particular activity is strategically crucial and internal control over the activity is deemed essential.
It takes successful offensive strategies to build competitive advantage—good defensive strategies can help protect competitive advantage but rarely are the basis for creating it.
It is just as important to discern when to fortify a company's present market position with defensive actions, as it is to seize the initiative and launch strategic offensives.
There are many ways to throw obstacles in the path of challengers.
Companies today must wrestle with the strategic issue of how to use their Web sites in positioning themselves in the marketplace — whether to use the Web sites just to disseminate product information or whether to operate an e-store to sell direct to online shoppers.
Because of first-mover advantages and disadvantages, competitive advantage can spring from when a move is made as well as from what move is made.
