The different types of competitive strategy
Posted: Mon Apr 21, 2025 9:12 am
More revenue: This is the natural extension of having more customers, and more loyal customers. When you can maintain a high customer lifetime value, you ensure more revenue with less marketing to get new customers.
Now that you understand why competitive advantage is important, let's look at the types of competitive strategies to achieve it.
As I said before, Porter's competitive advantage model has two main approaches:
Competitive Cost Advantage: Simply put, this is achieved by selling your products or services at lower prices than your competitors. This is a surefire way to steal customers from your competitors, although it doesn't necessarily thailand email list help build the brand loyalty you want.
Differentiation Competitive Advantage: This is achieved by standing out in some way, whether it be an offering, a unique feature, an exceptional customer experience, added value, or the like. This unique element is what attracts and retains customers, and is more likely to build loyalty in the long run.
Tip : Be careful when working on a low-cost model. It’s easy to get caught in the infamous “race to the bottom,” where you and your competitors keep lowering prices until nothing is profitable anymore.
Digging deeper into Porter's model, cost and differentiation strategies can be analyzed based on the scope of the business: a broad one, addressing large industries, groups and segments, or a niche one , with a narrower playing field.
competitive advantage
Source
Let's take a look at these four aspects:
Broad Cost Advantage . Think Amazon, Costco, or Walmart. Companies with a broad cost advantage cater to a large audience, produce or buy their products in bulk at low prices, and often outsource to keep their operating costs low.
Now that you understand why competitive advantage is important, let's look at the types of competitive strategies to achieve it.
As I said before, Porter's competitive advantage model has two main approaches:
Competitive Cost Advantage: Simply put, this is achieved by selling your products or services at lower prices than your competitors. This is a surefire way to steal customers from your competitors, although it doesn't necessarily thailand email list help build the brand loyalty you want.
Differentiation Competitive Advantage: This is achieved by standing out in some way, whether it be an offering, a unique feature, an exceptional customer experience, added value, or the like. This unique element is what attracts and retains customers, and is more likely to build loyalty in the long run.
Tip : Be careful when working on a low-cost model. It’s easy to get caught in the infamous “race to the bottom,” where you and your competitors keep lowering prices until nothing is profitable anymore.
Digging deeper into Porter's model, cost and differentiation strategies can be analyzed based on the scope of the business: a broad one, addressing large industries, groups and segments, or a niche one , with a narrower playing field.
competitive advantage
Source
Let's take a look at these four aspects:
Broad Cost Advantage . Think Amazon, Costco, or Walmart. Companies with a broad cost advantage cater to a large audience, produce or buy their products in bulk at low prices, and often outsource to keep their operating costs low.