4
comparison
with
its
rivals.
He
sees
competitive
advantage
of
companies
been
achieved through cost and differentiation.
The eight strategic options that companies face are as follows:
Option one – low price / low added-value
Likely to be segment specific
Option two – low price
Risk of price war and low margins / need to be a “cost leader”
Option three – Hybrid
Low cost base and reinvestment in low price and differentiation.
Option four – Differentiation
(a)
without a price premium
Perceived added value by user, yielding market share benefits
(b)
with a price premium
Perceived added valued sufficient to bear price premium
Option five – Focused differentiation
Perceived added value to a ‘particular segment’ warranting a premium price
Option six – Increased price / standard
Higher margins if competitors do not value follow / risk of losing market share.
Option seven – Increased price / low values, Only feasible in a monopoly situation.
Option eight – Low value / standard price, loss of market share
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