ManagementParadise.com : Worlds Leading Management Portal. MBA | Classroom, Boardroom and Beyond


Go Back   ManagementParadise.com Forums - Your MBA Online Degree Program and Management Students Forum for MBA,BMS, MMS, BMM, BBA, students & aspirants. > Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects > PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT

PORTERS 4 GENERIC STRATEGIES

PORTERS 4 GENERIC STRATEGIES

Discuss PORTERS 4 GENERIC STRATEGIES within the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT forums, part of the Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects category; Porter's Four Generic Competitive Strategies He argues that a business needs to make two fundamental decisions in establishing its competitive ...

Reply

 

LinkBack Thread Tools Display Modes
Advertisements
PORTERS 4 GENERIC STRATEGIES
Old
 (1 (permalink))
abhaycaya11@yahoo.co.in is on a distinguished road
 
abhaycaya11_yahoo.co.in
 
Institute: srknec
Status: Offline
Posts: 101
Join Date: Jan 2010
PORTERS 4 GENERIC STRATEGIES - January 26th, 2010

Porter's Four Generic Competitive Strategies

He argues that a business needs to make two fundamental decisions in establishing its competitive advantage: (a) whether to compete primarily on price (he says "cost," which is necessary to sustain competitive prices, but price is what the customer responds to) or to compete through providing some distinctive points of differentiation that justify higher prices, and (b) how broad a market target it will aim at (its competitive scope). These two choices define the following four generic competitive strategies. which he argues cover the fundamental range of choices. A fifth strategy alternative (best-cost provider) is added by some sources, although not by Porter, and is included below:
1. Overall Price (Cost) Leadership: appealing to a broad cross-section of the market by providing products or services at the lowest price. This requires being the overall low-cost provider of the products or services (e.g., Costco, among retail stores, and Hyundai, among automobile manufacturers). Implementing this strategy successfully requires continual, exceptional efforts to reduce costs -- without excluding product features and services that buyers consider essential. It also requires achieving cost advantages in ways that are hard for competitors to copy or match. Some conditions that tend to make this strategy an attractive choice are:
* The industry's product is much the same from seller to seller
* The marketplace is dominated by price competition, with highly price-sensitive buyers
* There are few ways to achieve product differentiation that have much value to buyers
* Most buyers use product in same ways -- common user requirements
* Switching costs for buyers are low
* Buyers are large and have significant bargaining power

2. Differentiation: appealing to a broad cross-section of the market through offering differentiating features that make customers willing to pay premium prices, e.g., superior technology, quality, prestige, special features, service, convenience (examples are Nordstrom and Lexus). Success with this type of strategy requires differentiation features that are hard or expensive for competitors to duplicate. Sustainable differentiation usually comes from advantages in core competencies, unique company resources or capabilities, and superior management of value chain activities. Some conditions that tend to favor differentiation strategies are:
* There are multiple ways to differentiate the product/service that buyers think have substantial value
* Buyers have different needs or uses of the product/service
* Product innovations and technological change are rapid and competition emphasizes the latest product features
* Not many rivals are following a similar differentiation strategy

3. Price (Cost) Focus: a market niche strategy, concentrating on a narrow customer segment and competing with lowest prices, which, again, requires having lower cost structure than competitors (e.g., a single, small shop on a side-street in a town, in which they will order electronic equipment at low prices, or the cheapest automobile made in the former Bulgaria). Some conditions that tend to favor focus (either price or differentiation focus) are:
* The business is new and/or has modest resources
* The company lacks the capability to go after a wider part of the total market
* Buyers' needs or uses of the item are diverse; there are many different niches and segments in the industry
* Buyer segments differ widely in size, growth rate, profitability, and intensity in the five competitive forces, making some segments more attractive than others
* Industry leaders don't see the niche as crucial to their own success
* Few or no other rivals are attempting to specialize in the same target segment

4. Differentiation Focus: a second market niche strategy, concentrating on a narrow customer segment and competing through differentiating features (e.g., a high-fashion women's clothing boutique in Paris, or Ferrari).

Best-Cost Provider Strategy: (although not one of Porter's basic four strategies, this strategy is mentioned by a number of other writers.) This is a strategy of trying to give customers the best cost/value combination, by incorporating key good-or-better product characteristics at a lower cost than competitors. This strategy is a mixture or hybrid of low-price and differentiation, and targets a segment of value-conscious buyers that is usually larger than a market niche, but smaller than a broad market. Successful implementation of this strategy requires the company to have the resources, skills, capabilities (and possibly luck) to incorporate up-scale features at lower cost than competitors.
This strategy could be attractive in markets that have both variety in buyer needs that make differentiation common and where large numbers of buyers are sensitive to both price and value.
Porter might argue that this strategy is often temporary, and that a business should choose and achieve one of the four generic competitive strategies above. Otherwise, the business is stuck in the middle of the competitive marketplace and will be out-performed by competitors who choose and excel in one of the fundamental strategies. His argument is analogous to the threats to a tennis player who is standing at the service line, rather than near the baseline or getting to the net. However, others present examples of companies (e.g., Honda and Toyota) who seem to be able to pursue successfully a best-cost provider strategy, with stability.
Advertisements
Friends: (0)
Reply With Quote
Related to PORTERS 4 GENERIC STRATEGIES
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Notes : Generic Strategies and Industry Forces jk4uonly Marketing Management 2 September 13th, 2010 02:56 PM
Porters Five Forces Milind G PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT 9 September 28th, 2009 09:25 PM
porter generic strategies Ashwini Sinha Marketing Management 0 August 19th, 2009 02:53 PM
Porters Generic Strategy Alistair Rego Marketing Management ( RM , IM ) 0 May 22nd, 2009 06:43 PM
porters model Sagar Dhadve Marketing Management 0 October 9th, 2006 07:59 PM
 

Re: PORTERS 4 GENERIC STRATEGIES
Old
 (2 (permalink))
Jagga Jagaaardel
Jigar4U is an unknown quantity at this point
 
Jigar4U
Student of MBA at pula din deal
Deoghar, Jharkhand
Management Paradise Newbie
 
Institute: pula din deal
Status: Offline
Posts: 195
Join Date: Jul 2009
Location: Deoghar, Jharkhand
Re: PORTERS 4 GENERIC STRATEGIES - August 28th, 2014

Nice Thread on Porter's Four Generic Competitive Strategies, Thanks for Sharing
Friends: (0)
Reply With Quote
Reply

Bookmarks

Tags
generic, porters, strategies

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


Login
Forgot Password?  New User?
  

» Ads





» Recent Threads

BEST BBA COLLEGE IN...
2 Hours Ago 12:13 PM
0 Replies
Business Etiquettes that...
2 Hours Ago 12:12 PM
0 Replies
PGDM COLLEGE IN GUJARAT
2 Hours Ago 12:09 PM
0 Replies
Epic Research Update :...
Last post by Epic Research
3 Hours Ago 10:59 AM
2 Replies
Epic Research Update :...
Last post by Epic Research
3 Hours Ago 10:57 AM
2 Replies
Epic Research Update :...
Last post by Epic Research
3 Hours Ago 10:55 AM
2 Replies
TYBMS SEM 5 HRM Solved... ( 1 2)
Last post by Nikhil Bohara
5 Hours Ago 09:11 AM
10 Replies
TYBMS Sem 5 Solved Board... ( 1 2 3... Last Page)
Last post by Nikhil Bohara
6 Hours Ago 08:28 AM
233 Replies
Given a choice between... ( 1 2 3... Last Page)
Last post by Gaurav Varma
13 Hours Ago 01:16 AM
133 Replies
Study of Marketing...
Last post by Amit Shah
16 Hours Ago 10:15 PM
1 Replies
Project on marketing...
Last post by Amit Shah
16 Hours Ago 10:03 PM
2 Replies
Top 10 Discussing about...
Last post by Murgha Joshi
17 Hours Ago 09:27 PM
0 Replies
Official Trailer of...
Last post by Murgha Joshi
17 Hours Ago 09:16 PM
0 Replies
TYBMS Sem 5 question...
Last post by Joel Francis
17 Hours Ago 09:08 PM
1 Replies
Watch PK Official Teaser...
Last post by Murgha Joshi
17 Hours Ago 09:04 PM
0 Replies

» Projects Helpline

Summer Internship...
Last post by Nitin Phalaswal
2 Days Ago 07:49 AM
projects in operations...
Last post by Pankaj Saini
2 Days Ago 01:19 AM
List of TYBMS 100 marks ...
Last post by Elle Robinson
3 Days Ago 01:47 PM
ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.


Management Paradise
About Us
Press
Jobs
Contact Us
Kartik Raichura
Legal
Terms & Conditions
Privacy Policy
Disclaimer
Copyrights
Help
Zeitgeist
Support
FAQs
Tour
Feedback
Partners
Follow
Copyright © 2004 - 2013 Management Paradise. Site Developed by Available.co.in