Ashima Negi is teaching live on Unacademy Plus
By:- Assistant Professor(Ms.)Ashima Negi Candidate For Doctorate (Ph.D.) UGC NET-Management. CA(I), MBA Finance, BBA, PGDM-Materials Management, NCFM, TOM & ISO 9000, QS g000 & Assurance, CCIBL
Strategic Management Porter's Generic Strategies
Porter's Generic Strategies -A firm positions itself by leveraging its strengths -Michael Porter has argued that a firm's strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus
Industry Cost Force Leadership on Differentiati Focus EntryAbility to cut price Customer loyalty can Focusing develops core Barrier!s in retaliation deters discourage potential conm competencies that can act as an entry barrier. potential entrants. entrants Buyer Ability to offer Large buyers have less Large buyers have less power Power lower price to power to negotiate because to negotiate because of few alternatives powerful buyers. of few close alternatives. Supplier Better insulated Better able to pass on Suppliers have power Powerfro from powerful suppliers. through suppliers, price because of low volumes increases to customers. Threat Can use low price Customer's becomeSpecialized products & to defend against attached to differentiating core competency protect substitutes. attributes, reducing threat against substitutes. of substitutes. kivalry Better able to Brand loyalty to keep Rivals cannot meet compete on price. customers from rivals. differentiation-focused customer needs.