Charging high costs for low value may be the default strategy in a monopoly

Competitive technique is how a company competes, or the approach taken by companies to market its products and services. Bowman's Strategy Clock is a tool to identify the competitive position of the company, or how the company convinces the customer to buy its products instead of what competitor.

An open market invariably has numerous players competing to give the same service or product, and customers select the option that they like the most. In such a business environment, companies try to gain competitive advantage over their competitors, by giving the customer with something that competitor products don't offer.
Michael Porter (1980) considers cost differentials, product differentials, and market segmentation as the three broad ways by which companies seek competitive advantage. Companies for example, strive to offer their products at a lesser price than the cost of competitor products, strive to offer better value when compared with competing products, or focus on the special needs of the segment ignored by competitors.
The Strategy Clock, produced by Cliff Bowman and David Faulkner in 1996 is definitely an attempt at expanding Porter's model, or creating a further in-depth analysis. It expands Porter's three strategic positions to eight, with each position representing a distinctive cost and perceived value combination.
 
A minimal price ' low value positioning -- is offering low quality products at the lowest price in the market. Many companies adopt such a strategy when their products belong to pressure in the competitors affordable prices, and they cannot overcome such price wars by providing products that differ in some manner.
Companies adopting this tactic would require huge sales volumes to pay for that low prices, by extension low margins. The reduced price would fetch such volumes, however the poor would mean that most customers would try the merchandise just once. As a result, this tactic suits only products with a short life cycle, where repeat clients are not relevant, or on products where quality is not a problem.
Low price positioning is placing the product at the lowest possible price level, with wafer-thin margins, looking to balance the low margins with high volumes. This kind of approach can trigger price wars that benefit the customers. Companies with limited resources may, however, find competing in price wars unsustainable with time. Just those companies with resources to sacrifice present profits for building up an identity as a low-cost provider brand is able to survive and reap long-term benefits.
Wal-Mart is good illustration of low price positioning. It attracts a large market share by providing products at a cost lower than what competitors charge for the same product. The company impression of a provider of good quality products at low-cost works well for sustaining the business over the long-term.
 
Hybrid positioning is really a "moderate price-moderate value" approach. Companies adopting this strategy offer neither the lowest price nor the highest quality. They rather aspire to strike a balance between price and quality and set up a reputation of providing products with reasonable quality at fair prices. They try to produce a perception of many being better in quality when compared to competitor products.
Customers think about the products provided by companies adopting a hybrid strategy as better value for money even if such products cost greater than, or even the just like, competing products. Discount department stores frequently adopt such a strategy.
 
 
Differentiation is the strategy of offering high value products, either at higher prices to pay for the low volumes of such products, or at low prices within the expectation that greater market share would make amends for the low margins.
Companies may approach differentiation in lots of ways, such as:
Types of well-known companies adopting a differentiation strategy are Nike, which positions itself like a high quality product with premium prices, Reebok, which has an picture of a high value product offered at a low premium, and Mark and Spencer, with a reputation for moderate to high prices for high quality products.
 
 
Focused differentiation may be the type of differentiation that provides quality value at high or premium prices, very often targeting a niche category, and compensating for lack of volume by high margins. Our prime value is usually a result of perception, cultivated through advertisements and careful selection of sales outlets instead of any substantial differentiation in the product.
Examples of items that have thrived by using focused differentiation are Gucci, Armani, and Most highly regarded. For example, Rolls Royce Silver Shadow costs 25 times a lot more than an economy Ford, and both scarpe da calcio magista serve exactly the same basic purpose, of taking you from Point A to Point B. A Gucci watch could cost 100 times greater than a Chinese made unbranded watch, and both serve the purpose of supplying the time.
 
 
Sometimes, companies simply increase price without adding any value towards the product. The elevated price might be because of an increase of input costs, seasonal factors, or another type. One company may take the lead in making the hike, with the knowledge that others equally affected by the same factors, would soon follow suit. In other cases, the organization could raise the price to consider advantage of some short-term factors such as disruption within the competitors supply chain, to rake in money with a long-term move of doing away using the product as part of a wider strategic goal.
Inside a competitive market, this method remains unsustainable for very long if adopted without any major triggers or reason. Companies arbitrarily increasing prices soon lose share of the market, as customers migrate to competitor items that provide the same value at affordable prices.
Charging high costs for low value may be the default strategy in a monopoly or oligopoly market, where just one or a few companies offer the service or product, and such goods or service remain in much demand. Many scarpe nike hypervenom items that start as monopolies adopt this positioning before the emergence of competitors forces them into another position. Cartels that enjoy price-fixing also apply this tactic.
Companies offering low value and high price cannot survive for nike mercurial superfly very long inside a competitive market, but may still make limited gains in an imperfect market where customers don't have use of prices of competing products, or perhaps in situations such as a "cruise-ship economy" in which the consumer has access simply to a restricted range of products.
 
 
Offering low value at standard prices, such as selling a damaged notebook at the cost of a fresh one, makes for an incredibly shortsighted business strategy, and could sometimes constitute fraud. Companies adopting such practices soon lose share of the market, as customers see through the defects and feel cheated. Firms that adopt this type of strategy are generally myopic, or fly-by-night operators who exploit customer ignorance or short-term monopoly conditions to create a quick buck and vanish.
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