Only the firms like Apple, Google, Microsoft, Starbucks etc. Michael E Porter has laid out three generic strategies — cost leadership, differentiation and focus to gain competitive advantage. The third generic strategy, he subdivided into two — cost focus and differentiation focus. There can be various sources of competitive advantages for businesses.
By applying these strengths in either a broad or narrow scope, three generic strategies result: These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent. By applying cluster analysis, researchers were able to differentiate 5 strategy types, which would be significant in e-businesses.
The second strategy that firms focused on had a positive and distinctive value only on the cost leadership dimension. The third strategy type occupies a less than even mediocre position on every strategic dimension and these firms have only a poor focus on internet specific differentiation.
This may reflect lack of clear strategic direction and resource commitment.
This type scores high on market leadership and product proliferation dimensions, indicating an emphasis on staying sensitive to customer needs through diverse products with short life cycle. The last strategy type is high on both the focus and Internet-specific differentiation dimensions, while also ranking very low on the other dimensions.
These firms do not appear to be concerned with price competition or overall market leadership. Instead, they appear to aim at a small segment of online customers, emphasizing Internet-specific factors such as transaction security and payment convenience.
They also suggest that focused strategies — those that are either narrowly defined differentiation strategies or those that focus on Internet-specific characteristics such as security and convenience of transaction — may have a better chance of success than cost leadership strategies.
However before MBA students start using these frameworks a pinch of caution needs to be exercised. Often one is not conversant on the context in which these frameworks may be used.
It is important to note that this framework is predominantly one which requires a static industry structure. Fluctuation in the ecosystem may require organizations to pursue a combination of strategies which may emulate from among these generic strategies.Porter’s Five Forces model is a simple and yet effective tool used for analyzing the level of competition in an industry.
It helps to analyze how the business itself is positioned relative to its competition and its competitive strength.
Free Essay: Michael Porter developed Porter’s Diamond, also known as The Diamond Model, in in his book ‘The Competitive Advantage of Nations’. that is Boston Consulting Group Model and Michael Porter’s Generic Strategies model. Formulation of Strategic Plan based on Boston Consulting Group Model Boston Consulting Group model is.
Toyota’s generic strategy (based on Porter’s model) emphasizes quality and innovation, which are also reflected in the company’s intensive growth strategies.
Founded in , the firm is now a global force in the automobile industry. This success is based on the effective implementation of Toyota’s generic strategy and intensive. Oct 31, · Automobile Industry Analysis Essay. Introduction Due attention should be paid to the use of the strategy tools and theories, such as Porter’s five forces and PESTEL analysis and other approaches.
(e.g. India, China, Indonesia and other developing countries). Weaknesses.5/5(1). This discussion however will centre on the Michael Porter’s Five Generic Competitive Strategies, which form the bases of domesticating company strategies. Low-cost provider strategy This strategy involves the organisation aiming to be the lowest cost producer within their industry.
This is a discussion of the Porter's generic strategy of differentiation adopted by Starbucks to generate and sustain competitive advantage. Starbucks Generic and Intensive Strategies. June 24, By Abhijeet Pratap Filed Under: Marketing In India too, it broke ground by forming a partnership with Tata.