• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Porter's Generic Strategies
 

Porter's Generic Strategies

on

  • 16,671 views

This revision presentation explains how Michael Porter suggested four "generic" business strategies that could be followed in order to gain competitive advantage. The differentiation and cost ...

This revision presentation explains how Michael Porter suggested four "generic" business strategies that could be followed in order to gain competitive advantage. The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are best used in a narrow market or industry

Statistics

Views

Total Views
16,671
Views on SlideShare
4,261
Embed Views
12,410

Actions

Likes
1
Downloads
0
Comments
1

15 Embeds 12,410

http://www.tutor2u.net 11867
http://student.kingedmoodle.co.uk 434
http://mtabusiness.weebly.com 37
https://my.berkeleycollege.edu 23
https://twitter.com 19
http://www.myonlinecolleges.net 8
http://www.weebly.com 5
http://www.google.co.uk 4
http://192.168.254.1 3
https://www.google.co.uk 3
http://131.253.14.66 2
http://tutor2u.net 2
https://www.google.com.hk 1
http://translate.googleusercontent.com 1
http://www.google.com.my 1
More...

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel

11 of 1 previous next

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Porter's Generic Strategies Porter's Generic Strategies Presentation Transcript

    • Porter: Generic Strategies
    • The marketing strategy challenge To find a way of achieving a To find a way of achieving a sustainable competitive sustainable competitive advantage over the other advantage over the other competing products and competing products and firms in a market firms in a market
    • What is a competitive advantage? An advantage over competitors An advantage over competitors gained by offering consumers gained by offering consumers greater value, either by means of greater value, either by means of lower prices or by providing lower prices or by providing greater benefits and service that greater benefits and service that justifies higher prices justifies higher prices
    • Porter’s Generic Strategies
    • Introducing Porter’s approach• Porter suggested four "generic" business strategies that could be followed in order to gain competitive advantage• The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments• By contrast, the differentiation focus and cost focus strategies are best used in a narrow market or industry
    • Cost leadership (1)With this strategy, the objective isWith this strategy, the objective is to become the lowest-cost to become the lowest-cost producer in the industry. This producer in the industry. Thistypically involves production on atypically involves production on a large scale which enables the large scale which enables the business to exploit economies of business to exploit economies of scale. scale.
    • Cost leadership (2)• Why is cost leadership important? – If selling prices are broadly similar, the lowest-cost producer will enjoy the highest profits• Suitable markets for this strategy? – Standard product – Little product differentiation – Branding relatively unimportant
    • Likely attributes of a cost leader• High levels of productivity• High capacity utilisation• Use of bargaining power to negotiate the lowest prices for production inputs• Lean production methods (e.g. JIT)• Effective use of technology in the production process• Access to the most effective distribution channels
    • Cost focus• Here a business seeks a lower-cost advantage in just one or a small number of market segments• The product will be basic - perhaps a similar product to the higher-priced and featured market leader, but acceptable to sufficient consumers• Such products are often called "me- toos"
    • Differentiation focusDifferentiation focus is the classicDifferentiation focus is the classic niche marketing strategy niche marketing strategy A business aims to differentiate A business aims to differentiatewithin just one or a small numberwithin just one or a small number of target market segments of target market segments
    • For differentiation focus to work…• Market segmentation – Clearly identifiable customer needs and wants – A valid basis for differentiation – Business able to meet the needs of the segment• Some possible approaches – Higher / highest quality – Specialist expertise / experience – Exclusiveness (e.g. through distribution)
    • Differentiation leadership With differentiation With differentiation leadership, the business leadership, the business targets much larger markets targets much larger markets and aims to achieve and aims to achievecompetitive advantage acrosscompetitive advantage across the whole of an industry the whole of an industry
    • Differentiation leadership (2)• Involves selecting one or more criteria used by buyers in a market - and then positioning the business uniquely to meet those criteria• Usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer• Differentiation is about giving customers clear reasons to prefer the product over other, less differentiated products• The strategy is not easy and it requires substantial and sustained marketing investment.
    • Ways to achieve differentiated leadership • Superior product quality (features, benefits, durability, reliability) • Branding (strong customer recognition & desire; brand loyalty) • Industry-wide distribution across all major channels (i.e. the product or brand is an essential item to be stocked by retailers) • Consistent promotional support – often dominated by advertising, sponsorship etc
    • Follow tutor2u on Twittertutor2u tutor2u_econ
    • Become a fan of tutor2u on Facebook! tutor2u on Facebook
    • Keep up-to-date with businessstories, resources, quizzes and worksheets for your business course. Click the logo!