The document discusses Michael Porter's generic strategies for achieving competitive advantage. Porter developed three generic strategies in the 1980s - cost leadership, differentiation, and focus. Cost leadership involves having the lowest costs to appeal to cost-conscious customers on a broad scale. Differentiation creates unique product attributes that allow premium pricing. Focus targets a narrow market segment, aiming for cost advantage or differentiation. Firms must choose one generic strategy to avoid being stuck between approaches.

1. STRATEGIC MANAGEMENT
SUBMITTED TO : PROF. SANDEEP SURANGE
SUBMITTED BY : ROSHAN DEVADIGA
TOPIC : MICHAEL PORTER’S GENERIC STRATEGY
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2. WHAT IS COMPETITIVE ADVANTAGE ?
• A COMPETITIVE ADVANTAGE IS WHEN A COMPANY
ACHIEVES HIGHER PROFIT THAN THE AVERAGE
COMPETITOR IN THE PRODUCT MARKET
• IT OCCURS WHEN AN ORGANIZATION ACQUIRES OR
DEVELOPS AN ATTRIBUTE OR COMBINATION OF
ATTRIBUTES THAT ALLOWS IT TO OUTPERFORM ITS
COMPETITORS
• INFORMATION TECHNOLOGY CAN PROVIDE
COMPETITIVE ADVANTAGE, WHETHER AS A PART OF THE
PRODUCT ITSELF OR AS AN ADVANTAGE TO THE MAKING
OF THE PRODUCT
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3. GENERIC STRATEGIES
• MICHAEL PORTER WAS A PROFESSOR AT HARVARD BUSINESS
SCHOOL
• HE DEVELOPED GENERIC STRATEGIES IN 80’s
• HE INTRODUCED GENERIC STRATEGIES TO ACHIEVE AND
SUSTAIN COMPETITIVE ADVANTAGE
• GENERIC STRATEGIES AIMS AT INCREASING THE
PROFITABILITY OF A FIRM AND TO OUTPERFORM
COMPETITORS
• PORTER CLAIMED THAT A COMPANY MUST CHOOSE 1 OF THE
GENERIC STRATEGIES
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4. GENERIC STRATEGIES CAN BE DEFINED BY 2 KEY DIMENSIONS
SCOPE OF THE
STRATEGY
THE COMPANY COULD TARGET :-
A BROAD MARKET
OR A
NARROW AND FOCUSED MARKET
SOURCE OF THE
COMPETITIVE MARKET
THE COMPANY COULD EITHER BE A :-
LOW COST LEADER
OR A
DIFFERENTIATOR
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6. OVERALL COST LEADERSHIP
• THIS STRATEGY INVOLVES THE FIRM WINNING THE MARKET BY
APPEALING TO COST-CONSCIOUS CUSTOMERS
• THE FIRM AIMS TO BECOME LOWEST COST PRODUCER
• THIS STRATEGY TARGETS A BROAD MARKET
• COMPETITIVE ADVANTAGE IS ACHIEVED BY DRIVING DOWN COSTS
• Eg. WALLMART, AMAZON
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7. DIFFERENTIATION STRATEGY
• A DIFFERENTIATION STRATEGY CALLS FOR THE DEVELOPMENT OF A
PRODUCT OR SERVICE THAT OFFERS UNIQUE ATTRIBUTES
• THIS STRATEGY IS APPROPRIATE WHEN THE T.G IS NOT PRICE SENSITIVE
• CUSTOMERS PERCEIVE THE PRODUCT TO BE DIFFERENT AND BETTER
• THE VALUE ADDED BY THE UNIQUENESS ALLOWS THE FIRM TO CHARGE
PREMIUM
• Eg: HARLEY DAVIDSON, APPLE
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8. FOCUS STRATEGY
• THE FOCUS STRATEGY CONCENTRATES ON A NARROW SEGMENT
AND WITHIN THAT SEGMENT ATTEMPS TO ACHIEVE EITHER A COST
ADVANTAGE OR DIFFERENTIATION
• THIS STRATEGY IS ALSO KNOWN AS A SEGMENTATION STRATEGY OR
NICHE STRATEGY
• A FIRM USING A FOCUS STRATEGY OFTEN ENJOYS A HIGH DEGREE
OF CUSTOMER LOYALTY
• E.g: PORSCHE
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9. CONCLUSION
• YOU CAN SELECT ANY ONE STRATEGY TO ACHIEVE COMPETITIVE
ADVANTAGE
• IT IS VERY DIFFICULT TO TRY TO DO MORE THAN ONE
• COMPANIES THAT TRY TO DO MORE THAN ONE FREQUENTLY GET
STUCK IN THE MIDDLE
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10. THANK YOU
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