Question
The concept of 'defendable position against the five competitive forces' refers to a strategic position a company can take to protect itself from the competitive forces in its industry. These forces include the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products or services, and the intensity of competitive rivalry. A company can create a defendable position by employing offensive or defensive tactics such as overall cost leadership, differentiation, or focus. Cost leadership involves becoming the lowest cost producer in the industry. Differentiation involves making your product or service unique in some way. Focus involves targeting a specific, narrow part of the market.
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An effective competitive strategy aims to create a defendable position against the five competitive forces through offensive or defensive tactics. This can be done by positioning the firm in a way that makes it defensible against the five forces and creating strategic moves that balance forces and anticipate shifts in forces. There are three broad strategic approaches to outperform competition: 1) overall cost leadership, 2) differentiation, and 3) focus.
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