Economy Alliances

Archive for December, 2011

The sources of cost advantage are varied and depend on the industry structure. May include preferential access to raw materials, proprietary technology, the pursuit of economies of scale and others.

Companies that work with low cost typically sell a standard, or product / service without ornaments and placed considerable emphasis on the scale of maturity. If a company manages and maintains the overall cost leadership will be an above average performer in a sector as long as their prices are at or near the average for that sector. At equivalent or lower prices of rivals this position translates into higher returns, but this leadership can not ignore the bases of differentiation. If a product is not perceived as comparable or acceptable to buyers, a cost leader will be forced to discount prices well below their competitors to make sales.

The strategic logic of cost leadership usually requires that a company is the leader in costs, and not one of several companies fighting for this position. When more than one aspiring cost leader, rivalry is usually hard for every point of market share is considered crucial. Unless a company can achieve cost leadership and persuade others to abandon their strategies, the utility consequences can be disastrous.

Differentiation

In a differentiation strategy, a company seeks to be unique in an industry with some qualities widely valued by buyers. Select one or more attributes that many buyers perceive as important and exclusive places to meet those needs. The rewards of its uniqueness is a higher price.
The sources for differentiation are particular to each sector. It can be based on the product or service itself, the delivery system through which it is sold, the marketing approach and a wide range of other factors.
A company can achieve and sustain differentiation will be an above average performer in the sector, if the price premium exceeds the extra costs incurred to be unique. A differentiators can not ignore its cost position because the higher price would be offset by a competitor with a markedly inferior cost position. So try to close as a differentiators from its competitors costs, reducing all other areas that do not affect differentiation.

A company must be truly unique or perceived as something only if you want a higher price. In contrast to cost leadership may be more than one successful differentiation strategy in a sector if there are several attributes that are widely valued by buyers.

APPROACH

This strategy is very different from the others because it relies on the choice of a narrow view of competition within an industry. The “focused” select a group or segment and adjust its strategy to serve them to the exclusion of others. By optimizing its strategy for the target segments, it seeks to gain a competitive edge in its segment but does not have an overall competitive advantage.

The focus strategy has two variants: cost focus and differentiation focus.

Read the rest of this entry »

Set the attractiveness of the industry and our relative competitive position is what makes the choice of a competitive strategy challenging and exciting.

While the attractiveness of the sector is partly a reflection of factors over which the company has little influence, competitive strategy has considerable power to make the sector more or less attractive. Therefore, it not only responds to the environment but about creating the environment for the company.

As we saw in the previous edition, the 5 competitive forces (entry of new competitors, the threat of product / service substitutes, the bargaining power of buyers, bargaining power of suppliers and rivalry among existing competitors) are that determine the attractiveness of the sector and its main causes and identifies three broad generic strategies to achieve competitive advantage.

Although a company may have millions of strengths and weaknesses compared to its competitors, there are two basic types of competitive advantages a company can possess: low cost or differentiation.

The two basic types of competitive advantage combined with the panorama of activities for which a company tries to achieve them, leads to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation and focus.

Each of these generic strategies involves a different route to competitive advantage at a time which depends on the scenario of strategic targets. The strategies of cost leadership and differentiation seeking competitive advantage in a wide range of industrial sectors, while strategies try to achieve focus on a narrow segment.

The idea behind the concept of generic strategies is that competitive advantage is at the heart of any strategy, and achieving competitive advantage requires a company to make a choice about the kind of advantage that seeks to achieve and the landscape within which do it. Being “all for all” is a recipe for strategic mediocrity and the below average performance, because in reality means that there is no competitive advantage at all.

COMPETITIVE ADVANTAGE

1. Cost Leadership
2. Differentiation
3. Focus on Costs

Consumers can be segmented in terms of styles and can purchase different target marketing strategies to each segment. For common stages of the buying process, marketers can make an insight into the likely behavior itself (introspective method), although this has limited usefulness. They can interview a small number of recent buyers, asking them to remember the events that led to the acquisition of the product (retrospective method). They can look for some consumers planning to buy the product and ask them to point out loud their buying process (prospective method). Or, consumers can apply to describe the ideal way to buy the product (prescriptive method).

STAGES OF PURCHASE DECISION

The buying process starts long before the purchase itself and has consequences long after the purchase was made.

Recognition of the need: the buying process starts when the buyer recognizes a problem or need. The need may be triggered by internal or external stimuli.

If collecting information from multiple consumers, the marketer can identify the most common stimuli that generate interest in a particular class of product.

Search for information: a consumer pleased manifest propensity to seek more information. The search state increased attention is called moderate. An active information search is to find material and undertake other research to learn more. The enthusiasm with which the search is undertaken depends on the intensity of the impulse, the initial information with which account, in the ease of obtaining information, the value to be granted and the satisfaction you get from it. Usually, the search by the consumer increases as the consumer goes situations of limited solution of the problem to solution of the problem extensively.

For the marketer interest are the main sources of information will appeal to consumers and influence each will have on the subsequent purchase decision. The consumer information sources comprise four groups:

- Personal Sources: family, friends, neighbors, acquaintances.
- Trade sources: advertising, sellers, distributors, packaging, displays.
- Public sources: mass media, consumer rating organizations.
- Sources Experimental management, analysis, use of the product.

Read the rest of this entry »

Solar Panels make for an easy solution for home owners who want a renewable, non-polluting source of energy to power the lights and appliances in their home. Installing your own solar panels allow you to generate free electricity from the sun that never needs to be refueled, has no moving parts to wear out, and require little to no maintenance for the first 3-5 yrs after installation.

Unless there is some prominent structural reason, most all domestic solar panel installations have their solar panels are installed facing the southern sky since this orientation picks up the maximum solar radiation that you use to convert to free electricity. Modern solar panels work just as well on normal radiant daylight even with overcast skies and no longer require direct sunlight all the time so they are ideal for even a British summer.

The installation of solar panels can be done on most any type of modern manufactured roofing material of flat or slanted style as long as it is in good physical condition before the installation is started. A quality installation team will inspect the roof first, and might require roofing repair before they will begin installation to avoid damaging an already poor roof.

To insure a long lasting trouble free installation, choose solar panel installers that are with registered with the Micro-generation Certification Scheme (MCS) so your installation can be registered on the grid and instantly qualify for the Feed In Tariff Scheme income.