Glossary

competition
Business actions a firm undertakes to attract customers to its products and away from competitors' products.
competitive advantage
When a firm successfully attracts more customers, earns more profit, or returns more value to its shareholders than rival firms do.
cost-leadership strategy
A generic business-level strategy in which a firm tightly controls costs throughout its value chain activities in order to offer customers low-priced goods and services at a profit.
differentiation strategy
A generic business-level strategy in which firms add value to their products and services in order to attract customers who are willing to pay a higher price.
focus strategy
A generic business-level competitive strategy that firms use in combination with either a cost-leadership or differentiation strategy in order to target a smaller demographic or geographic market with specialized products or services.
generic business-level strategies
Basic methods of organizing firm value chain activities to compete in a product market that can be used by any sized firm in any industry.
strategic group
Businesses offering similar products or services and following the same generic competitive strategy.
strategy
Process of planning and implementing actions that will lead to success in competition.