Strategic Options give direction to the actions of the company by answering the basic question of the company. What do we want to identify and take into perspective?
- Cost - appeals to cost-conscious or price-sensitive
customers and the firm must be able to operate at a lower cost than its rivals.
- high asset utilization
- achieving low direct and indirect operating costs
- control over the value chain encompassing all functional groups (finance, supply/procurement, marketing, inventory, information technology etc..) to ensure low costs
- Differentiation - appropriate where the target customer segment is not price-sensitive, the market is
competitive or saturated, customers have very specific
needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy.
- patents or Intellectual Property (IP)
- unique technical expertise
- design skills
- animation prowess
- talented personnel
- innovative processes
- Focus - a competitive advantage through product innovation and/or brand marketing rather than efficiency
- Target Markets / Marketing Mix
- Niche Markets
- New Shareholder Model