This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 1 of 10 · 15 min
Competitive strategy and positioning
A company's strategy is judged by whether it defends against the five forces, fits the external influences and can be executed with the company's resources; most successful strategies are variants of cost leadership, differentiation or focus.
In short
- Every company has a strategy, intentional (planned, measured, refined) or unintentional (teams following habit or norms); unintentional strategies are rarely best.
- A strategy's effectiveness shows up only in hindsight (economic profit). Looking forward, ask three questions: does it defend against the five forces, does it fit the PESTLE influences, and does the company have the resources and capabilities to execute it?
- Cost leadership: scale, cheap inputs, cost discipline, aggressive pricing for volume, low-cost distribution, economies of scope. Suits capital-intensive industries with price-conscious customers who do not notice product differences.
- Differentiation: brand, service, quality, unique features, IP protection, premium pricing. Suits customers who value distinctiveness more than price and innovative industries.
- Focus: serve a particular group (customer, product or geography) closely, using cost and/or differentiation elements; works where others find that group hard to serve.
- Being stuck in the middle (none of the three) is a poor position.
Unlock this lesson free for 7 days
Create a free account to get 7 days of full access — every lesson, video, flashcard, mock and the question bank. No card needed.