For amulti-national company, the best types of competitive strategy to adopt wouldbe Cost leadership and/or Differentiation leadership strategy For example, a company could make a commodity uniquelybuilt for gamers like a specialized headset used for online gaming.Differentiationfocus: Like the cost focus strategy, this type of strategyalso focuses on a specific population area of the market, but instead of beingthe cheapest seller of a product, it tries to market that product to thespecific area as a unique product or service, this way differentiating itselffrom one or more competitors.For example, a service provider, like MTN, couldchoose to focus on a particular town or city and then strive to be the cheapestin the town only. This kind of strategy enables firms to satisfy consumers andgain popularity.
Costfocus: This type of strategy is similar to the costleadership strategy except that it focuses on a niche (specific) market. Thecompany concentrates its efforts on a specific population area of the marketand keeps its products low priced in an attempt to establish itself as thecheapest seller in that specific market area. Again, this is another type of competitive strategythat large companies and firms would most likely adopt due to the largeinvestment of resources in the research and development of new products.
Differentiationleadership: With this type of competitive strategy, companiesoffer a wide array of unique and different goods or services. Firms can targetto achieve market leadership because other competing firms will not be able tosurpass the company’s standards. This type is typically only employed by largecompanies, small companies cannot partake in this type of type of competitivestrategy due to the involvement of economies of scale.Costleadership: This type of strategy involves the firm striving tobecome the lowest cost producer of a certain commodity in the industry byproducing in large scale which allows the firm to achieve economies of scale.Then, the firm sells the cheaply made products to consumers at the lowestmarkup price possible thereby making it harder or virtually impossible forother competitors to compete.4.
Differentiationfocus3. Costfocus2. Differentiationleadership1. CostleadershipTypesof Competitive Strategy This type of strategy isdirected at creating a defensive position in an industry and achieving asuperior ROI (Return on Investment). ROI measures the profit or lossaccumulated on an investment corresponding to the amount of money invested, itis expressed in percentage and is used to compare the profitability of two ormore companies.
Competitive strategy isdefined as the long term operation of a firm or company which will allow it toachieve an advantage over it’s other competing firms and companies in it’s areaof production. This strategy involves the use of negatively showcasing a rivalcompany’s product in order to turn the consumers attention away from thecompetition.