Competitive strategy is the long-term plan of a particular company in order to gain competitive advantage over its competitors in the industry. The free market economy allows for competition. In fact, it thrives on competition. Consumers of goods and services are looking at getting more value for less money. Thus, a business is forced to review the value it offers as well as the price it gives it to the market. It can be very demanding on the business at that particular time as the competitor may have the capacity to easily mark down prices. However, there needs to be a price review to ensure that business is not taken by customers to the competitor.

The aim of generating returns on investment is paramount to every investor and without competitive marketing strategies; the market share formerly retained could have been hijacked by competitors.

Cost Leadership

First, you have to understand that cost is difference from price. Cost deals with production; price deals with the retail price to consumers. Cost leadership is establishing a competitive advantage by operating at the lowest cost of production in the industry. This will give the business the opportunity to offer competitive prices that are hardly beatable by other retailers. Cost leadership is often driven by company efficiency, size, scale, scope, and cumulative experience. Walmart is one company that has been successfully able to use cost leadership to its advantage by ensuring that quality is produced at the lowest cost possible. This has allowed the big retailer offer hardly beatable prices.

Differentiation Leadership

How do you think Apple has been able to stay in the market with its expensive products and the biggest market share in the telecommunication market in the United States? The company has always offered premium pricing and has relied solely on the brand image it has created for itself. With the use of innovation, uniqueness, beauty, and elegance, the company creates high-end products that are largely and widely accepted by its customers all over the world. For a business to be able to achieve this, there must be a difference in what the business is offering. The product must be difference from others of its kind in the market. More, the manufacturer must focus on the competitive edge of the product projecting it as unique and innovative.

Cost Focus

This is when a business seeks a lower-cost advantage in just some few market segments. The product will be basic and will compete with high priced items to gain its market share. It get price leadership due to its cheaper production cost.

Differentiation Focus

This is offering something different from what competitors are offering. The manufacturer using this strategy works on the notion that consumers have different wants and needs but the other manufacturers are not meeting the needs and demand; thus, there is an opening for differentiation. Differentiation focus is very strategic as it allows for businesses to establish themselves, achieving higher prices than undifferentiated products through the innovative adding of value and elegance for customers.