Hybrid Strategies

In contrast to generic competitive strategies (Michael E. Porter), hybrid strategies aim to integrate cost and differentiation advantages. Two types of hybrid strategies can be distinguished:

  • Sequential or „outpacing“ strategies first concentrate on one of the two strategic options, and then the other. For instance, an innovative company may first undergo a phase of differentiation in which it markets a new product that offers high value to customers and can be sold at a premium price. Next it needs to push back any competitors that will inevitably appear on the scene by making a strategic shift to gaining cost leadership. Through product and process standardization, the company will lower prices enabling it to sustain its competitive advantage. With the development of new products, the cycle repeats.

  • Simultaneous strategies aim to generate cost and differentiation advantages at the same time. One way to achieve that is mass customization, that is by producing customized products at a price similar to those of mass-produced products. Customization may be achieved through design or mixing-and-matching of components.

Examples of companies perusing hybrid strategies include IKEA, Swatch, Dell, Toyota, Sony, and Canon.

See also: competitive strategies