Five Characteristics Of Competitive Strategies

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Five possible competitive strategies. American economist and researcher Michael Porter wrote a book “Competitive Strategies”. In this book he describing five possible strategies for the firm in their industries based on advantages of the product and target scope of the customers. For the product advantage he took two basic parameters; low cost and product uniqueness. And for target scope was also used two groups; broad (industry wide) or narrow (market segment). So based on these conditions of the market and product strength five possible strategies can be applied; cost leadership, cost focus, broad differentiation, focus differentiation and best cost strategy. Cost leadership strategy can be best described as low cost products (compare to…show more content…
“Krusty Krab” mainly focused on families with children from six till twelve years old. “Krusty Krab” will be perfect place for the weekend outing and special occasions such as birthday party etc. So “Krusty Krab” aiming narrow market segment. On the other hand customers will come to the restaurant for the new experience, not only for the food. So people willing to pay premium price for good service, healthy food, entertainment. Based on this optimal strategy for the “Krusty Krab” is focus differentiation. Characteristics of the focus differentiation…show more content…
So “Krusty Krab” also need perfect brand image to make customers come back. It can be achieved by the two main approaches: food and service. Food is important for the parents, they want to be sure that quality of the dishes is high and safe. Taste is also important factor not only for the parent but also for the kids. Service is more important for the kids; during the time of the food preparation kids in “Krusty Krab” can play in the special areas and qualified staff will take care of them. Also it is possible to organize special performance for kids and their parents. To achive it “Krusty Krab” internal corporate culture must be very good. All employees will get special training before they actually start working. Tasty and safe food in addition to the perfect service should make customers happy and create brand loyalty. Brand loyalty will be main competitive advantage of the “Krusty Krab” in the industry. However in focus differentiation strategy power of the suppliers is also a weakness and “Krusty Krab” is not an exception. On the market there are a lot of food suppliers and switching cost from one to another is not high so it will not create a problem. However supplier of the license (Nickelodeon) will have big influence because of the using their intellectual property. It is possible to also sell souvenirs in the restaurants: it will make additional profit for the Nickelodeon and
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