Competitive Strategy: Core Concepts

How Will You Win? Choose Your Strategy.

To beat the competition, you need a clear game plan. Michael Porter says you have three basic options.

1. Cost Leadership (Be the CHEAPEST)

• Goal: Offer the lowest prices.
• How: Extreme operational efficiency, economies of scale.
• Think: Walmart, Ryanair.
• Question for You: [ ] Can we be the undisputed low-cost producer in our market?

2. Differentiation (Be the BEST or MOST UNIQUE)

• Goal: Offer something special that customers will pay more for.
• How: Superior quality, design, brand image, or customer service.
• Think: Apple, Starbucks.
• Question for You: [ ] What unique value can we offer that is hard to copy?

3. Focus (Be the SPECIALIST)

• Goal: Dominate a small, specific market niche.
• How: By tailoring your product and marketing perfectly to a narrow audience.
• Think: A vegan-only restaurant, a law firm that only serves tech startups.
• Question for You: [ ] Is there a specific group of customers whose needs are being ignored?

The Biggest Mistake: Being “Stuck in the Middle.” Don’t be a jack-of-all-trades and master of none. Pick one strategy and commit to it.