Michael Porter described three basic forms of competing - Cost, Differentiation and Niche? What are each strategy and what are the advantages and disadvantages of each?
-Cost:Increasing profits by reducing costs, while charging industry-average prices OR
Increasing market share through charging lower prices, while still making a reasonable profit on each sale because you've reduced costs
>Advantages:Access to the capital needed to invest in technology that will bring costs down, Very efficient logistics, A low-cost base (labor, materials, facilities), and a way of sustainably cutting costs below those of other competitors.
>Disadvantages: not unique to you, and that other competitors copy your cost reduction strategies
-Differentiation: making your products or services different from and more attractive than those of your competitors
>Advantages:Good research, development and innovation, The ability to deliver high-quality products or services, Effective sales and marketing
>Disadvantages:attack on several fronts by competitors pursuing Focus Differentiation strategies in different market segments, cut off many potential consumers
-Niche: concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low-cost or well-specified products for the market
>Advantages: build strong brand loyalty amongst their customers, market segment less attractive to competitors
>Disadvantages: organization is too small to serve a broader market, risk competing against better-resourced broad market companies' offerings
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