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Strategic Buisiness

In: Business and Management

Submitted By 688389
Words 7630
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Managers within a strategic business unit or small organizations can make use of a variety of strategic techniques ideas and tools as part of the business planning process .Critically review the value of the main tools that exist to determine the most appropriate bases of competitive advantage including Porter’s thinking on generic strategies.
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1. Porter’s Generic Competitive Strategies
The Porter’s Generic Competitive Strategy defines whether a company follows competitive advantages through its share market scope. (Porter, Michael E., 1985)

Competitive Advantage

Competitive Advantage

Differentiation

Differentiation

Low Cost

Low Cost

Broad Target

Broad Target

Competitive Scope

Competitive Scope

Narrow Target

Narrow Target

There are three generic strategies, either lower cost, differentiated, or focus. The focus strategy has two variants, cost focus and differentiation focus. A firm selects to pursue one of two types of competitive advantages. 1. Cost Leadership: Through lower costs than its competition or become a low cost producer in its industry. 2. Differentiation: By differentiating itself along some dimensions that are widely valued by customers to command a higher price. 3. Focus: A company also chooses one of two types of scope, either focus offering its products to selected segments of the market or industry-wide, offering its product across many market segments.
The focus strategy has two variants, cost focus and differentiation focus. In cost focus a company seeks a cost advantage in its target segment, while in differentiation focus a company seeks...

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