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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
Differentiation Strategy - A differentiation strategy alls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. - The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product.
Firms that succeed in a differentiation strategy often have the following internal strengths: Access to leading scientific research. 2 Highly skilled and creative product development team M Strong sales team with the ability to successfully communicate the perceived strengths of the product. Corporate reputation for quality and innovation
Risks Involved - Imitation by competitors and changes in customer tastes Various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments.
Medimix herbal soap differentiated itself on the herbal plank two decades back when there were only synthetic soaps. - A new brand of herbal soap launched in today's context has to probably define the herbal qualities through an enhanced mix of ingredients to convey the differentiation because herbal' is the proposition of several brands both new and old. The established Medimix brand is currently running a campaign, which conveys the brand benefits through appropriate imagery