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1- The strategies are (1) overall cost leadership, (2) differentiation, and (3) focus on a particular market niche. according to the external and internal situation company should choice to move on one this strategies. there is a trade-off between these strategies. by means choosing the one against the two others.
2- (Trade-off because of limited resources) the company can not change the external situation. it just is able to choose the best way to move forward.
3- (Trade-off between move or stop)changing means risk for companies. so there is a trad-off between the feel of security which is made by being unmoved and stable and feeling the risk as a result of changing which can lead the company towards growth and survivng.
Positioning trade-offs are pervasive in competition and essential to strategy. They create the need for choice and purposefully limit what a company offers. They deter straddling or repositioning, because competitors that engage in those approaches undermine their strategies and degrade the value of their existing activities. Trade-offs arise for three reasons.
1. Inconsistencies in image or reputation
A company known for delivering one kind of value may lack credibility and confuse customers—or even undermine its reputation—if it delivers another kind of value or attempts to deliver two inconsistent things at the same time. Efforts to create a new image typically cost tens or even hundreds of millions of dollars in a major industry—a powerful barrier to imitation.
2. Activities themselves
Different positions (with their tailored activities) require different product configurations, different equipment, different employee behavior, different skills, and different management systems. Many trade-offs reflect inflexibilities in machinery, people, or systems. However, trade-offs can be even more basic. In general, value is destroyed if an activity is over-designed or under-designed for its use. Moreover, productivity can improve when variation of an activity is limited.
3. Limits on internal coordination and control
By clearly choosing to compete in one way and not another, senior management makes organizational priorities clear. Companies that try to be all things to all customers, in contrast, risk confusion in the trenches as employees attempt to make day-to-day operating decisions without a clear framework.
