1. Strategic Market Management 7th Edition – David Aaker
Marketing Strategy
Session-4 By
Dr. Ravindra Pratap Gupta

2. ISSUED IN PUBLIC INTEREST
Advisable
“All material in slides need not be understood. Use your current working environment and experience to relate to situations. Errors and omissions regrettable. Subject to corrections on being brought to notice”
As felt 3 hours one session and 6 sessions in total to complete all concepts of the subject in depth is not possible. So giving an overview is the aim.

3. Syllabus
Marketing Strategies. Competitive Advantage: Generic Strategies; Cost Leadership Strategy; Differentiation Strategy; Focus Strategy; Use of the value chain.
New Generic Strategies: Product Leadership; Customer Intimacy Strategy; Operational Excellence;
Competitive Strategies; Strategy for Market Leader; Expand the total Market; Protect its current Market Share; Market Challenger Strategies; Market Follower Strategies; Market Nicher Strategies;
International Marketing Strategies; Marketing Mix strategies.

4. Marketing Strategy-Defined
A statement of how a brand will achieve its objectives. The strategy provides decisions and direction regarding variables such as the segmentation of the market, identification of the target market, positioning, marketing mix elements, and expenditures. A marketing strategy is usually an integral part of a business strategy that provides broad direction to all functions.
(Source: American Marketing Association)
“Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.”
-John Scully

5. Competitive Advantage & How it is Obtained
Resources+Capabilities = Competitive Edge
Competitive Advantage
What sets an organization apart -- competitive edge
Controlling or having something others do not have
Doing something better than other organizations
Doing something other organizations cannot do

6. Resources, Capabilities & Competitive Advantage
Resources are firms specific assets useful for creating a cost or differentiation advantage that few competitors can acquire easily (patents & trade marks, Proprietary know-how, Installed Customer base, Reputation of the base, Brand Equity).
Capability refers to firms ability to utilize its resources effectively. (Ability to bring a product faster in the Market)
Competitive Advantage implies gaining the edge on others – using resources & capabilities
But not every firm is able to
Effectively exploit its resources & capabilities
Obtain resources & capabilities it needs
Some firms are able to “pull it together” & develop distinctive capabilities, others don’t
As firms strive for sustainable CA, stage for competition is set – low, moderate, intense.

7. Competitive Advantage
“Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match.” Philip Kotler
When a firm sustains profit that exceeds the average of industry. The firm is said to have competitive advantage over its rivals.
A Competitive advantage exists when a firm is able to deliver the same benefits as competitors but at a lower cost (cost Advantage) or deliver benefits that exceed those of competitive products. (Differentiation Advantage).

8. Competitive Advantage & Competitive Strategy
Competitive strategies are designed to exploit an organization’s competitive advantage
Competitive Advantage concentrates on firm & Competitive Strategy on Industry
Firms exploits competitive advantage by
Finding ways to use resources & capabilities to set firm apart from competitors
Firms competitive strategy-consists of business approaches to
Attract customers by fulfilling their expectations
Withstand competitive pressures
Strengthen market position
There are other competitors also trying to develop competitive advantage & attract customers thus Competitive advantage can be eroded easily (& often quickly) by rival’s actions.
The goal of much Business Strategy is sustainable Competitive advantage

9. Porter’s Generic Competitive Strategies
Competitive advantage come from one of two sources:
Having the lowest cost in the industry
Possessing a product or offering a service that is perceived as unique in the industry
Another important factor is the scope of the product-market (broad or narrow)
Mix of these factors provide basis for
Cost leadership strategy (low-cost strategy)
Differentiation strategy
Focus strategy

10. Porter’s Generic Competitive Strategies
Competitive Advantage
Low Cost
Differentiation
Broad
Cost Leadership
Differentiation
Market
Scope
Focus
(Differentiation)
Focus
(Low Cost)
Narrow

11. Focus
Middle of the road
Cost
Differentiation

12. Cost leadership How? Benefits Possible problems New sources of supply
Relocating to low cost parts.
Modification/simplification of design.
Operating effectiveness
Size and economies of scale-globalization.
Strategic alliances
Benefits
The ability to outperform rivals
Erect barriers to entry
Resist the five forces
Possible problems
Vulnerability to even lower cost operators
Possible price wars
Difficulty of sustaining it in the long term

13. Differentiation How? Benefits Possible problems
High performance in one or more of a spectrum of activities
The consistent pursuit of those factors which customers perceive to be important
The creation of strong Brand Equity
Benefits
A distancing from others in the market
The creation of a major competitive advantage
Flexibility
Possible problems
The difficulty of sustaining the bases for differentiation
Possibly higher costs
The difficulty of achieving true and meaningful differentiation

14. Focus Possible problems How? Benefits
Limited opportunities for sector growth
A reputation for specialization which ultimately inhabits growth and development into other sectors
The possibility of outgrowing the Market
The decline of the sector
How?
Concentration upon Specific product line for a specific group of customer
The creation of a strong and specialist reputation
Benefits
A more detailed understanding of a particular segments
The creation of Barriers to entry
A reputation for specialization
The ability to concentrate efforts

15. Cost Leadership Strategy
Objective:
Gain sustainable competitive advantage over competitors, using low-cost (not price).
Produce for broad customer base
Product quality prime parameter for success.
Keys to Success:
Low-cost relative to competitors
Low cost implies overall low cost with focus on Quality
low manufacturing or production cost.
Marketing Cost
Human Resources

16. Best Example in India Telecom Industry Players Chinese Toys
Beverage: Tea (Agni)
Pharma Companies as Mankind

17. Example-Reconfiguring Value Chain Systems to Lower Costs -- Software Industry
A. Value Chain System of Software Developers Using Traditional Wholesale-Retail Channels - Highest Cost
Software development activities
CD-ROM production and packaging activities
Marketing and promotion of software
Warehousing and shipping of wholesaler-retailer orders
Technical support activities
Activities of software retailers
Activities of wholesale distributors of software products

18. Example-Contd, Reconfiguring Value Chain Systems to Lower Costs -- Software Industry
B. Value Chain System of Software Developers Using Direct Sales and Physical Delivery of CDs
Software development activities
CD-ROM production and packaging activities
Direct and online marketing and promotion activities
Ware-housing and shipping of customer orders
Technical support and customer service activities
C. Value Chain System of Software Developers Using Online Sales and Internet Delivery - Lowest Cost
Software development activities
Online marketing and promotion activities
Systems to accept credit card payment and allow immediate download
Technical support and customer service activities

19. Characteristic of Cost Leaders
Champion frugality
Strict attention to production controls
Rigorous use of budgets
Little product differentiation
Limited market segmentation
Emphasis on productivity improvements
Distinctive capabilities found in manufacturing & materials management

20. Successful Pursuit of Cost Leadership Strategy
Every strategic decision is aimed at keeping cost as low as possible
Efficiency is sought in all areas of operation
All functional strategies & capabilities are directed at efficiency
Doesn’t have deep & wide product lines
Market products aimed at “average” customer
Little or no product frills or differences

21. When Cost Leadership Works Best
Price competition is vigorous.
Product is standardized or readily available from many suppliers.
There are few ways to achieve differentiation that have value.
Most buyers use product in same ways Buyers incur low switching costs.
Buyers are large and have significant bargaining power.

22. The Competitive Strengths of Low-Cost Leadership-Porters 5 Forces Impact
Better positioned than RIVAL COMPETITORS to compete offensively on basis of price
Low-cost provides some protection from bargaining leverage of powerful BUYERS
Low-cost provides some protection from bargaining leverage of powerful SUPPLIERS
Low-cost provider’s pricing power acts as a significant barrier for POTENTIAL ENTRANTS
Low cost puts a company in position to use low price as a defense against SUBSTITUTES

23. Drawbacks of Cost Leadership Strategy
Being overly aggressive in cutting price
Low cost methods are easily imitated by rivals
Becoming too fixated on reducing costs and ignoring
Buyer interest in additional features (tastes)
Declining buyer sensitivity to price
Changes in how the product is used
Technological breakthroughs open up cost reductions for rivals

24. Differentiation Strategy
Objective
Offering products/services perceived as unique over the brands of rivals in an industry.
Keys to Success
Offer products/services that create value to customers
Offer products/services not easily matched or easily copied by rivals
Not spending more to differentiate the firm’s products or service than the price premium that can be charged

25. Benefits of Differentiation
A product / service with unique and appealing attributes allows a firm to
Command a premium price and/or
Increase unit sales and/or
Build brand loyalty

26. Differentiation Themes
Unique taste -- Maggi
Special features -- Iphone, Blackberry
Superior service -- FedEx, DTDC
Spare parts availability -- Caterpillar
More for your money -- McDonald’s, Wal-Mart
Engineering design and performance -- Mercedes
Prestige -- Rolex
Quality manufacture -- Honda , Toyota, Pharma Co’s
Technological leadership -- Microsoft, Intel
Top-of-the-line image -- Starbucks, Gap

27. Characteristics of Successful Differentiators
Every strategic decision & action is directed at setting the firm apart from competitors
All functional strategies & capabilities are aimed at isolating & understanding specific market segments & developing product features that are valued by customers
Has broad and wide product lines -- many different models, features, price ranges, etc.
Has many market segments & product features
Controls costs but not as rigorous as the cost leader to preserve source of differentiation
Strives to establish brand loyalty
Competitive capabilities tends to be in marketing and research & development

28. Buyer loyalty acts as a barrier to POTENTIAL ENTRANTS
The Competitive Strengths of a Differentiation Strategy-Porters 5 Forces
Buyers develop loyalty to brand they like best--can beat RIVAL COMPETITORS in the marketplace
Mitigates bargaining power of large BUYERS since other products are less attractive
Differentiation puts a seller in better position to withstand efforts of SUPPLIERS to raise prices
Buyer loyalty acts as a barrier to POTENTIAL ENTRANTS
Differentiation puts a seller in better position to fend off threats of SUBSTITUTES not having comparable features

29. When Differentiation Works Better
There are many ways to differentiate a product that have value and please customers
Buyer needs and uses are diverse
Few rivals are following a similar type of differentiation approach
Technological change is fast-paced and competition is focused on evolving product features

30. Drawbacks of Differentiation
Trying to differentiate on a feature buyers do not perceive as lowering their cost or enhancing their well-being
Over-differentiating such that product features exceed customers’ needs
Charging a price premium that customers perceive is too high
Failing to signal value
Not understanding what customers want or prefer and differentiating on the “wrong” things

31. Competitive Strategy Principle
A low-cost producer strategy can defeat a differentiation strategy when buyers are satisfied with a standard product and do not see extra attributes as worth paying additional money to obtain!

32. Focus Strategy
Firm pursues either a cost leadership or differentiation strategy but in a narrow customer group of segment
Concentrates on serving specific market niche
Geographical area
Type of customer -- specific group of customers
Specific & specialized product line

33. Focus Strategy Objective
Serve the niche customers better than competitors
Keys to Success
Choose a market niche where buyers have distinctive preferences, special requirements, or unique needs
Develop unique capabilities to serve needs of target buyer segment

34. Focus Approaches Approach 1: Cost Advantage
Achieve lower cost than rivals in serving the specific or narrow segment
Focus Low-cost
Ikea: Young furniture buyers who want style at low cost (price sensitive and low service customer groups)
Southwest Airlines: Short-haul, point-to-point service between midsize cities & secondary airports in large cities (low pricing & low service)
KB Fair Price Shop

35. Focus Approaches… Approach 2: Differentiation Advantage
Offer customers in niche market something unique in that market
Product features
Product innovations
Product quality
Customer responsiveness
Focus Differentiation
Rolex: Serve highest end of wristwatch market (premium pricing & image)
Rolls-Royce: Serving luxurious end of automobile market (premium pricing & image)

36. Advantages of the Focus Strategy
The focuser knows its market niche and knows it well
The focuser can stay close to customers and respond quickly to their changing needs
Focuser can develop strong brand loyalty which can be difficult for other competitors to overcome

37. Drawbacks of Focus Strategy
Operates in small scale making it difficult to lower costs significantly. Technological advances has minimized this drawback
Competitors find effective ways to match a focuser’s capabilities in serving niche market
Niche can become part of the overall market
Segment becomes so attractive it becomes crowded with rivals, causing segment profits to be splintered

38. Value Chain Analysis
Value chain analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.
Value chain represents the internal activities a firm engages in when transforming inputs into outputs.
Value chain analysis is a strategy tool used to analyze internal firm activities. Its goal is to recognize, which activities are the most valuable (i.e. are the source of cost or differentiation advantage) to the firm and which ones could be improved to provide competitive advantage.
In other words, by looking into internal activities, the analysis reveals where a firm’s competitive advantages or disadvantages are.
The firm that competes through differentiation advantage will try to perform its activities better than competitors would do.
If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would do.
When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits.

39. Value Chain Analysis
Primary activities add value directly to the production process, they are not necessarily more important than support activities.
Primary activities are usually the source of cost advantage, where costs can be easily identified for each activity and properly managed.
Support activities are usually the most important source of differentiation advantage as ‘information systems’, ‘R&D’ or ‘general management’.
Competitive advantage mainly derives from technological improvements or innovations in business models or processes.

40. Competitive advantage types
Value Chain Analysis
Competitive advantage types
Cost advantage
Differentiation advantage
This approach is used when organizations try to compete on costs and want to understand the sources of their cost advantage or disadvantage and what factors drive those costs.
The firms that strive to create superior products or services use differentiation advantage approach.
Step 1. Identify the firm’s primary and support activities.
Step 2. Establish the relative importance of each activity in the total cost of the product.
Step 3. Identify cost drivers for each activity.
Step 4. Identify links between activities.
Step 5. Identify opportunities for reducing costs.
Step 1. Identify the customers’ value-creating activities.
Step 2. Evaluate the differentiation strategies for improving customer value.
Step 3. Identify the best sustainable differentiation.

41. Value Chain Framework-Implementation

42. Use of the value chain
Value Chain Analysis is a useful way of thinking through the ways in which you deliver value to your customers, and reviewing all of the things you can do to maximize that value.
It takes place as a three stage process:
Activity Analysis, where you identify the activities that contribute to the delivery of your product or service.
Value Analysis, where you identify the things that your customers value in the way you conduct each activity, and then work out the changes that are needed.
Evaluation and Planning, where you decide what changes to make and plan how you will make them.
By using Value Chain Analysis and by following it through to action, you can achieve excellence in the things that really matter to your customers.

43. Competitive Strategies In Operational Excellence, Customer Intimacy And Product Leadership
To succeed in the marketplace, companies must embrace a competitive strategy.
Authors Michael Treacy and Fred Wiersma describe three generic competitive strategies, or value disciplines: 
Operational Excellence
Customer Intimacy 
Product Leadership
These are described in their book, The Discipline of Market Leaders (1997).
The author’s main premise is that companies must choose—and then achieve—market leadership in one of the three disciplines, and perform to an acceptable level in the other two.

44. Operational excellence as a competitive strategy
An operational excellence strategy aims to accomplish cost leadership.
Here the main focus centres on automating manufacturing processes and work procedures in order to streamline operations and reduce cost.
The strategy lends itself to high-volume, transaction-oriented and standardized production that has little need for much differentiation.
A strategy of operational excellence is ideal for markets where customers value cost over choice, which is often the case for mature, commoditized markets where cost leadership provides a vehicle for continued growth.
Leaders in the area of operational excellence are strongly centralized, with strong organizational discipline and a standardized, rule-based operation.
Measuring the performance of key processes and benchmarking costs comprise an integral part of the operations of these companies who relentlessly seek to streamline their processes in order to eradicate errors.
Disciplines such as TQM, SCM and Six Sigma are cultivated in a volume-oriented business model.
Examples of companies pursuing this competitive strategy include Wal-Mart, IKEA, Southwest Airlines, McDonald’s and FedEx.

45. Customer intimacy as a competitive strategy
Customer intimacy focuses on the needs of the individual customer
The customer intimacy strategy focuses on offering a unique range of customer services that allows for the personalization of service and the customization of products to meet differing customer needs.
Often companies who pursue this strategy bundle services and products into a “solution” designed specifically for the individual customer.
The successful design of solutions requires vendors to possess deep customer knowledge as well as insights into their customers’ business processes.
These types of companies often keep an entire ecosystem of partners for the actual production and delivery of products and services to their customers.
The solutions offered rarely present the cheapest option for the customer, nor the most innovative, but are regarded as “good enough.”

46. Customer intimacy as a competitive strategy
Customer-centric companies tend to have a decentralized organization which allows them to learn and change quickly according to customers’ needs.
True customer intimacy can only arrive through aligning the product development, manufacturing, administrative functions and executive focus around the needs of the individual customer.
Examples of companies who pursue this type of strategy include IBM, Lexus, Virgin Atlantic and Amazon.com.

47. Product leadership as a competitive strategy
Product leadership as a competitive strategy aims to build a culture that continuously brings superior products to market.
Product leaders achieve premium market prices due to the experience they create for their customers.
Product leaders recognize that excellence in creativity, problem solving and teamwork is critical to their success.
The corporate disciplines they cultivate include:
Research portfolio management
Teamwork
Product management
Marketing
Talent management
Product Leaders reliance on expensive talent i.e. that product leaders seek to leverage their expertise across geographical and organizational boundaries by mastering such disciplines as collaboration and knowledge management.

48. Product leadership as a competitive strategy
Companies pursuing a strategy of product leadership include consumer electronics, fund management, automotive and pharmaceutical industries, etc.
Examples of these include Apple, Fidelity Investments, BMW and Pfizer.

49. Competitive Positions
Competitive Strategy
Competitive Positions
Expanding the total demand
Finding new users
Discovering and promoting new product uses
Encouraging greater product usage
Protecting market share
Prevent or fix weaknesses
Fulfill value promise
Keep prices consistent with value
Build relationships
Continuous innovation
Expanding market share
Joint ventures
Mergers and acquisitions
Example: Microsoft, Apple
Market Leader
Market Challenger
Market Follower
Market Nicher

50. Competitive Positions
Competitive Strategy
Competitive Positions
Challenge the market leader
High-risk but high-gain
Sustainable competitive advantage over the leader is key to success
Challenge firms of the same size or smaller regional and local firms
Full frontal vs. indirect attacks
Example: Canon in Copiers displaced Xerox from its dominant position, Nirma versus HUL, IBM , Toyota against General motors.
Market Leader
Market Challenger
Market Follower
Market Nicher

51. Competitive Positions
Competitive Strategy
Competitive Positions
Follow the market leader
Many advantages:
Learn from the market leader’s experience
Copy or improve on the leader’s offerings
Strong profitability
Does not mean being a carbon copy of the leader
Example Ponds followed Olay in Anti-aging segment, Moser Beer to Samsung and Sony.
Market Leader
Market Challenger
Market Follower
Market Nicher

52. Competitive Positions
Competitive Strategy
Competitive Positions
Serving market niches means targeting sub-segments
Followed by certain big companies later on.
Good strategy for small firms with limited resources.
Earns high margins rather than high volume
Specialization is key
Customer size, geographic, quality-price, service
Breakfast Cereal category taken by FMCG Companies, All sizes from Pantaloons
Market Leader
Market Challenger
Market Follower
Market Nicher

53. The Elements of the Marketing Mix for International Firms
Product
Pricing
Promotion
Place

54. International Marketing Mix Concerns
How to develop the firm’s products?
How to price those products?
Who is the Target Market?
How to distribute those products to the firm’s customers?
How to sell those products?

55. International Marketing Mix
 When launching a product into foreign markets firms can use a standard marketing mix or adapt the marketing mix, to suit the country they are carrying out their business activities in.

56. International Marketing Mix: Product
Product policy on the international market includes three strategies:
Product standardization - company introduces unchanged product on the foreign market.
Such action makes sense when the product due to its nature, has similar utility for customers on various markets.
The use of this strategy is comfortable and not very expensive.
Example of companies using this strategy is IKEA.
Product adaptation - involves adjustment of the product and its properties to the conditions prevailing on the particular market.
This includes packaging, size, symbols (depending on the culture prevailing in the country concerned), colour.
Adaptation of the product requires large amount of capital and experience.
Gradual changes in the product - used in situation where there is no danger of the emergence of competition.

57. International Marketing Mix: Product
Basic marketing concepts tell us that we will sell more of a product if we aim to meet the needs of our target market.
In international markets this will involve taking into consideration a number of different factors including consumer's cultural backgrounds, religion, buying habits and levels of personal disposable income.
In many circumstances a company will have to adapt their product and marketing mix strategy to meet local "needs and wants" that cannot be changed.
McDonalds is a global player however, their burgers are adapted to local needs. In India where a cow is a sacred animal their burgers contain chicken or fish instead of beef. In Mexico McDonalds burgers come with chilli sauce.
Coca-cola is some parts of the world taste sweeter than in other places.
The arguments for standardisation state that the process of adapting the product to local markets does little more than add to the overall cost of producing the product and weakens the brand on the global scale.

58. International Marketing Mix: Product
In today’s global world there is no need to adapt products to local markets as consumers travel more, watch satellite television, communicate and shop internationally over the internet, the world is a smaller than it used to be.
Brands such as Nike, Levis are all successful global brands where they have a standardised approach to their marketing mix, all these products are targeted at similar groups globally.
Both strategies; using a standard product and an customised product can work just as well.
The right approach for each organisation will depend on their product, strength of the brand and the foreign market that the marketing is aimed at.

59. International Marketing Mix: Promotion
Promotion policy involves transferring information to new potential buyers about the company, its products in order to make them to buy these products.
Selection and use of the instruments needed to achieve these objectives depends on factors such as:
Objective of promotion on the international market.
Financial resources and experience in foreign markets.
Provisions of the law which regulate promotional activities in each country,
Cultural factors - e.g. Language, habits, religion, symbols, associations related to the colour.
Attitude to foreign products.
Competition on the foreign market, The company may take similar actions as experienced competitors or, if it is lacking in resources, cooperate with the participants in the distribution channel and jointly carry out promotion.
The nature and quality of the product
Type of the customer.

60. International Marketing Mix: Promotion
As with international product decisions an organisation can either adapt or standardize their promotional strategy and message.
Advertising messages in countries may have to be adapted because of language, political climate, cultural attitudes and religious practices.
For example a promotional strategy in one country could cause offence in another.
Every aspect of promotional detail will require research and planning one example is the use of colour; red is lucky in China and worm by brides in India, whilst white is worn by mourners in India and China and brides in the United Kingdom.
Many organisation adapt promotion strategies to suit local markets as cultural backgrounds and practices affect what appeals to consumers.
The level of media development and availability will also need to be taken into account. Is commercial television well established in your host country? What is the level of television penetration? How much control does the government have over advertising on TV, radio and Internet? Is print media more popular than TV?
Before designing promotional activity for a foreign market it would be expedient to complete a PEST analysis so that you have a complete understanding of the factors operating in the foreign market you would like to enter.

61. International Marketing Mix: Pricing
Pricing involves the problem of price management on an international scale.
There are two basic points of view:
Separate pricing -usually, company introduce separate pricing policies on foreign markets (due to differences of wealth, competition, etc.),
Global pricing strategy-development of modern communication technology makes distant markets more similar to each other, which makes it harder to lead a separate pricing policy at home and abroad.
In this case, the company carries out a global pricing strategy, when the processes of internationalization blur the differences between the various markets.

62. International Marketing Mix: Pricing
Pricing on an international scale is a complex task taking into account traditional price considerations such as fixed and variable costs, competition and target groups.
An organisation needs to consider additional factor such as
The cost of transport 
Tariffs or import duties
Exchange rate fluctuations
Personal disposal incomes of the target market
The currency they want to be paid in and
The general economic situation of the country and how this will influence pricing.
The internet has created further challenges as customers can view global prices and purchase items from around the world.
This has increased the level of competition and with it pricing pressures, as global competitors may have lower operating costs.

63. International Marketing Mix: Place
The Place element of the marketing mix is about distributing a product or service to the customer, at the right place and at the right time.
Distribution in national markets will probably involve goods being moved in a chain from the manufacturer to wholesalers and onto retailers for consumers to buy from.
In an overseas market there will be more parties involved because the goods need to be moved around a foreign market where business practices will be different to national markets.
For example in Japan there are approximately five different types of wholesaler involved in the distribution chain.
Business will also need to investigate who they would like to sell their products and services to government, businesses, wholealers, retailers, or directly to consumers.

64. International Marketing Mix: Place
Businesses will need to investigate distribution chains for each country they would like to operate in.
The distribution strategy for each country a business operates in could be different due to profit margins and transportation costs.

65. Questions Q 1) Fill in the blanks
Resources are firms specific assets useful for creating a cost or differentiation advantage that few competitors can acquire easily (patents & trade marks, Proprietary know-how, Installed Customer base, Reputation of the base, Brand Equity).
Capability refers to firms ability to utilize its resources effectively. (Ability to bring a product faster in the Market).
Competitive Advantage implies gaining the edge on others – using resources & capabilities.
A low-cost producer strategy can defeat a differentiation strategy when buyers are satisfied with a standard product and do not see extra attributes as worth paying additional money to obtain
Value chain analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.
Value chain represents the internal activities a firm engages in when transforming inputs into outputs.
Primary activities add value directly to the production process, they are not necessarily more important than support activities.
Support activities as ‘information systems’, ‘R&D’ or ‘general management’ are usually the most important source of differentiation advantage
Product standardization - company introduces unchanged product on the foreign market.
Product adaptation - involves adjustment of the product and its properties to the conditions prevailing on the particular market.

66. Questions Q 6) Discuss International Product Mix?
Q 2) Discuss any one Porter’s Generic Competitive Strategies in detail?
Q 3) Discuss Value Chain Analysis & Use of the value chain?
Q 4) Discuss Competitive Strategies in Operational Excellence, Customer Intimacy and Product Leadership?
Q5) Write short notes on
Market Leader
Market Challenger
Market Follower
Market Nicher
Product standardization
Product Adaptation
Q 6) Discuss International Product Mix?

67. Thanks