Hybrid competitive strategies

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Business field strategies that successfully combine cost leadership with differentiation are called hybrid competitive strategies. However, this approach contradicts Michael Porter's incompatibility hypothesis , according to which each business area must choose one of the two strategies in order to generate competitive advantages .

Proponents of hybrid strategies are that the generic considers competitive strategies by Porter not always meet the requirements arising from the dynamic conditions of the corporate environment. Therefore, Porter's approach was critically reflected and a number of hybrid competitive strategies were formulated to support companies in flexibly combining the competitive strategies of differentiation and cost leadership. The aim is to achieve a synchronous improvement in the differentiation and cost position.

A distinction is made between three different variants of the hybrid strategy: the simultaneous, the sequential and the multilocal strategy.

Simultaneous strategy

Here the processes for achieving cost leadership and differentiation run simultaneously. The company secures competitive advantages by adapting to different changing environmental conditions. Due to the rapid changes in the market, complex planning phases arise. This is a disadvantage of the simultaneous strategy.

Corsten and Will are of the opinion that the simultaneous achievement of cost leadership and differentiation can be achieved through the design of the production processes. The competitive requirements and the production strategy must be tailored to one another as well as possible. Your strategic approach combines a favorable cost position with strong differentiation.

Kaluza developed the approach of dynamic product differentiation to secure competitive advantages . The core of his strategy is changing customer preferences. The company must react flexibly to changes and be able to change products as quickly as possible. To achieve dynamic product differentiation, technology, organization and employees must be optimally adapted to the company.

The Davis and Pine mass customization strategy combines mass production with individual customer preferences. In this way, advantages of cost leadership and differentiation are realized at the same time. The adaptation to demand takes place on the basis of a few, but decisive, characteristics.

The Blue Ocean Strategy has been developed and expanded by W. Chan Kim and Renée Mauborgne at the INSEAD Business School since 1997 and initially referred to as Value Innovation in your article in the Harvard Business Review. Their basic concept is based on differentiation to create relevant customer benefits and the optimization of cost structures by eliminating unnecessary cost drivers. This combination of different strategic decisions enables the company to serve a broad mass of customers or non-customers and to open up newly created markets through competition that has become insignificant.

Sequential strategy

The sequential strategy also aims to combine the two competitive strategies of cost leadership and differentiation. However, this happens alternately. Once a certain, desired competitive position has been achieved, the company is encouraged to switch from one strategy to the other. It is assumed that the advantages that arose from the previously used strategy will be retained for the company after the change. The cash flow that was generated in this way should this view be expended therefor according, to perform the change in strategy. Furthermore, important innovations are often associated with this change for the company. A disadvantage of the sequential strategy is that companies need a lot of financial resources for this. In addition, the change between strategies can lead to conflicts within the personnel structure, as the management style tends to be harder among cost leaders and lean personnel structures are said to be of it, whereas with the differentiation strategy, the personnel and the managers are given more creative freedom. These disadvantages thus also explain why Porter assumes lower profitability if the position is unclear.

The aim of Gilbert and Strebel's outpacing strategies is to secure a competitive edge by switching between the strategic options of cost leadership and differentiation. The good produced should offer a high benefit at a low price. In the differentiation phase - if possible - product standards should be created so that costs decrease in the phase of cost leadership through process and product standardization. Due to changing conditions, the products need to be renewed. This leads to the renewed pursuit of the differentiation strategy.

Multi-local strategy

In the multi-local strategy, the two competitive strategies of cost leadership and differentiation are linked to the company's internationalization strategy. With the multi-local strategy, there is a spatial decoupling of the respective strategic orientations. The desire for cost leadership due to increasing homogenization of the international market contrasts with the differentiation strategy due to local differences. The aim of the strategies is to achieve the highest possible return on sales. The respective company must take its own strengths and weaknesses into account when deciding on the international orientation.

At this point, Meffert differentiates between the four different strategy types global , dual , international and multinational . The global strategy standardizes both products and production on an international level. The dual strategy pursues the simultaneous achievement of globalization and localization advantages. With the international strategy, the unadjusted products are sold from the home market to the foreign markets. The multinational strategy aims to adapt products locally.

literature

  • Frank Himpel, Bernd Kaluza, Jochen Wittmann: Spectrum of production and innovation management . Gabler. Wiesbaden 2008, pp. 34-36
  • Detlef Effert: Quality and price image at banks . Gabler Publishing House. Wiesbaden 2010, pp. 114–118
  • Martin Kaschny, Daniel Ruppert, Alexander Bitzhoefer, Kai Andre Doniges: Incompatibility Hypothesis: Graphical and Mathematical Explanations , in American Journal of Business, Economics and Management, Vol. 3, No. 4, 2015, pp. 177-185.
  • Martin Sonnenschein: Strategies for new business . Erich Schmidt Publishing House. Bamberg 2001, pp. 162-174
  • Herwig Winkler, Michael Slamanig: Generic and hybrid competitive strategies at a glance . published in: Economics Studies. Issue November 11, 2009, pp. 546–552

Individual evidence

  1. ↑ Martin Sonnenschein: Strategies for new business . Erich Schmidt Verlag, Bamberg 2001, p. 162 .
  2. ^ Kaschny, Martin / Ruppert, Daniel / Bitzhoefer, Alexander / Doniges, Kai Andre: Incompatibility Hypothesis: Graphical and Mathematical Explanations . In: American Journal of Business, Economics and Management . Vol. 3, No. 4 , 2015, p. 179 .
  3. ↑ Martin Sonnenschein: Strategies for new business . Erich Schmidt Verlag, Bamberg 2001, p. 162 .
  4. ↑ Winkler, Herwig / Slamanig, Michael: Generic and hybrid competitive strategies at a glance . In: Economics Studies. Issue 11, November 2009, p. 547 .
  5. ^ Sunshine, Martin: Strategies for new business . Erich Schmidt Verlag, Bamberg 2001, p. 168-169 .
  6. ↑ Winkler, Herwig / Slamanig, Michael: Generic and hybrid competitive strategies at a glance . In: Economics Studies. Issue 11, November 2009, p. 547-548 .
  7. ↑ Winkler, Herwig / Slamanig, Michael: Generic and hybrid competitive strategies at a glance . In: Economics Studies. Issue 11, November 2009, p. 548-549 .
  8. ^ W. Chan Kim, Mauborgne Renée: "Creating new Market Space", in: Harvard Business Review , January / February 1999, pp. 83-93.
  9. ^ W. Chan Kim, Mauborgne Renée: The blue ocean as a strategy: how to create new markets where there is no competition . 2nd, updated and exp. Edition Hanser, Munich 2016, ISBN 978-3-446-44676-2 .
  10. ↑ Effert, Detlef: Quality and Price Image at Banks . Gabler, Wiesbaden 2010, p. 114-118 .
  11. ^ Sunshine, Martin: Strategies for new business . Erich Schmidt Verlag, Bamberg 2001, p. 163-165 .
  12. ↑ Winkler, Herwig / Slamanig, Michael: Generic and hybrid competitive strategies at a glance . In: Economics Studies. Issue 11, November 2009, p. 549 ff .
  13. ↑ Himpel, Frank / Kaluza, Bernd / Wittmann, Jochen: Spectrum of production and innovation management . Gabler, Wiesbaden 2008, p. 35-36 .