Strategy Library

Hybrid competitive strategies

In contrast to the classic generic competitive strategies by Michael E. Porter, hybrid strategies aim for both cost and differentiation advantages.

Description of hybrid competitive strategies

There are two types of hybrid competitive strategies that can be distinguished according to the timing:

  • Sequential strategies or Outpacing strategies, provide for a timely change between the two strategy options. For example, an innovative company can first go through a phase of differentiation in which it launches innovative products that offer great benefits to the customer and help them to achieve high prices. Then it's time to push back imitators, who inevitably appear on the scene, by changing the strategy to cost leadership. By means of product and process standardization, the innovation company is now lowering prices, allowing it to further expand or at least maintain its competitive edge. With the development of new products, the cycle starts all over again.
  • Simultaneous strategies are aimed at the simultaneous realization of cost and differentiation advantages. This can be achieved, for example, by mass customization, i. by producing individualized products at a cost just above those of mass production. Individualization is often achieved through the design or individual composition of individual product components.

Examples of companies that have successfully applied hybrid strategies are IKEA, Swatch, DELL, Toyota, Sony and Canon.

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