What Are The Five Generic Competitive Strategies

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The Five Generic Competitive Strategies The five generic competitive strategies help companies build competitive advantage and superior value to customers. The five generic competitive strategies consist of: low-cost provider, broad differentiation, focused low-cost, focused differentiation, and best-cost provider. These strategies are a company’s first and primary choice in constructing a business strategy. Each of the five strategies will be looked at in more detail, along with the companies that choose to follow these strategies. The first generic competitive strategy, the low-cost provider, gives lower overall costs than a company’s competitor. Examples of low-cost providers are Walmart, Ikea, and Southwest Airlines. All three companies are in completely different industries, but each holds the lowest prices and competitive advantage over its’ rivals. Walmart has several sustainable competitive advantages. Having lower product costs while reducing inventory carrying costs (using cross-docking, which allows products to be routed from suppliers to Walmart’s warehouses, where products are then shipped to stores without sitting for long periods of time in inventory,) has reduced Walmart’s costs significantly passing the savings onto the customers. This strategy has made Walmart the dominant force around the globe. Even though the profit margins are slimmer for Walmart, it makes up for it in sheer volume of sales. Ikea’s low-cost strategy begins backward. First, Ikea

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