This website uses cookies to ensure you have the best experience. Learn more

Generic Competitive Strategies Essay

2149 words - 9 pages

Porter describes a structure for evaluating the behavior of costs, the determinants of relative cost position, and the way firms can gain a sustainable cost advantage or minimize their cost disadvantage. The study also reveals the cost differentiation, and the ways a differentiated competitor can lower costs in the areas that do not undercut its differentiation. Porter also made a concrete proposal over the value chain and its connection to cost analysis. Porter said that "the value chain provides the basic tool for cost analysis". He began describing the pattern of the value chain relative to cost analysis by showing how to define a value chain for cost analysis purposes and how to associate costs and assets with value activities. He then described how to analyze the behavior of cost, using the concept of cost drivers. Cost drivers are the structural determinants of the cost of an activity, and differ in the extent to which a firm controls them. Cost drivers determine the behavior of costs within an activity, reflecting any linkages or interrelationships that affect it. A firm's cost performance in each of its major discrete activities cumulates to establish its relative cost position. After presenting the framework for analyzing cost behavior, Porter then tells how a firm assesses the relative cost of competitors and achieves a sustainable cost advantage. He then describes some important pitfalls in developing an understanding of cost position. Then porter concluded the chapter with a discussion of the steps in strategic cost analysis. On the next chapter "Differentiation", Porter presented a framework for analyzing differentiation and choosing a differentiation strategy. He describes the sources of differentiation, which can arise anywhere in a firm's value chain. He said that successful differentiation strategies grow out of the coordinated actions of all parts of a firm, not just the marketing department. He then showed how to determine the cost differentiation and how it varies by competitor. He also described how to diagnose what types of differentiation create buyer value, employing the buyer's value chain as a tool for doing so. Next, he showed how to translate an analysis of buyer value into specific buyer purchase criteria. Finally, Porter used all of those concepts to describe how to choose all of these concepts to describe how to choose a differentiation strategy, and highlight some common pitfalls in pursuing one.Just as it was helpful to use Porter's Five Forces model as a framework to analyze industries, Porter's Value Chain is an effective tool to understand, at a high level, how each of internal business activities adds value to organizations by dividing a business into strategically relevant activities (Primary and Support Activities). And it enables top management to identify the source of competitive advantage by performing these activities in a cost-effective way or better than its competitors. As a very powerful cost...

Find Another Essay On Generic Competitive Strategies

Business level strategies: Generic Strategies Essay

1016 words - 4 pages Question 2 Business level strategies are also referred to as Generic Strategies. Identify and discuss these Generic Strategies and how firms can use these to create a competitive advantage. Porters Generic Strategies Everyone wants a competitive advantage in this world. A competitive advantage is like a golden ticket to wealth and riches, to a world where your company rules. If one’s organisation is on the higher ground it is always

Strategic Marketing Essay

595 words - 2 pages below:The first scheme considers market dominance. In this type of marketing strategy, the firms are divided according to their share in the market or their dominance in any industry/market. Three marketing strategies are in relevance to the market dominance scheme are chief, challenger, follower.•Porter generic strategies - this strategy depends on two factors; strategic scope and strategic strength. Strategic scope refers to the ability of a

A.L. Labs case analysis from the book International Marketing by Terpstra

1900 words - 8 pages , human nutrition, and animal health respectively they decided to diversify away from animal feed to pharmaceuticals especially the generic pharmaceuticals. The company has jumped over the process of technology development and strategies now focus on investments that will increase their market share. With this strategy in mind, A.L. Labs started focusing on the distribution of their new product line, the generic pharmaceuticals. Increase

Asbcas

2317 words - 10 pages firms of its type; identifies scope of operations including markets, customers, products, distribution, technology, etc. in manner that reflects values and priorities of the firm's strategies. Competitive Advantage: Advantages that a firm has over its competitors. See also Sustainable Competitive Advantage. Competitive Position: The position that a firm has or wishes to achieve within its industry as measured against its competition. Compiled by

International Paper Foodservice Business: Strategic Choice and Evaluation

1096 words - 4 pages Paper Foodservice Business has committed itself to the community by giving back in safe product and monetary value to protect forestry programs. Generic Strategy Although product leadership is a key element to the future success of International Paper Foodservice Business, its generic strategy must be the basis that keeps it competitive in the ever-growing market. According to Pearce & Robinson (2011), companies will seek a “competitive

The Roles of Operation Strategy in Business

1665 words - 7 pages relationship between the strength of competitive forces and industry profitability. According to Porter, companies that successful in defending themselves against the competitive forces are believed to be able to anticipate above-average profits. (4) The five competitive forces model is used to identify the three generic competitive strategies to achieve a defendable competitive position. Porter argues that these generic competitive strategies

Business Analysis: Orbitz Worldwide

1247 words - 5 pages to help users research options, by improving the quality of the hotel content that is available (such as editorial descriptions, photographs, virtual tours and user-generated reviews) and by developing systems and technologies that will allow us to provide customers with more personalized and relevant search results. Generic Strategies Orbitz, has to seek a competitive advantage in the online travel industry and to do this Orbitz has to look at

Taxonomy

2306 words - 9 pages factor or a combination of factors which makes an organisation more successful than other organisation in a competitive environment (Kenneth, 1980).To relate the classification of strategy adopted by Priya and the strategy in general we have to taxonomies' them based on the table mentioned below. According to that table, it is easy to classify (Taxonomies) all the Porter's generic strategies based on the five forces model and similarly all the

international business machines

675 words - 3 pages  Integration Web Sphere middleware is an integration platform & Sterling Commerce Generic competitive strategies that best characterizes IBM strategic approach to competing successfully In my Opinion, generic competitive strategy comes from being aware of the structure and the changes taking place in the industry. There are two generic competitive strategies that best characterizes International business machines strategic approach

Business stretegy

5746 words - 23 pages to introduce a new ball point pen in Bangladesh. They have found out that there are already some established competitors operating in this field such as Econo, Writer Etc. Moreover, international brand such as Indian brands are also popular in Bangladesh. And so, to gain competitive advantage in this sector, the new company should implement Cost Leadership Strategies which is a part of the main Strategy called Michael Porter's Five Generic

W.L. Gore & Associates Marketing Analysis

1487 words - 6 pages as an important tool for auditing the overall strategic position of a business and its environment. The SWOT analysis provides the company with the insights in crafting apt strategies and policies for the future marketing plans. Porter’s Generic Competitive Strategic Model Besides, the SWOT analysis the company largely uses, generic competitive strategies developed by Michael Porter. This model includes three approaches namely cost leadership

Similar Essays

Different Views On Business Strategies Essay

2133 words - 9 pages CONTENTS Acknowledgement 1 INTRODUCTION 1 PORTER'S VIEW ON BUSINESS STRATEGY: 2 Five competitive forces model: 2 Limitations of Five Forces Model: 5 GENERIC STRATEGIES 5 Limitations of Generic Strategies 7 Conclusion 7 Bibliography 9 Acknowledgement First praise is to Allah, the Almighty, on whom ultimately we depend for sustenance and guidance. I would like to express my gratitude and appreciation to all those who gave me the

“The Competitive Position Of A Company Is Determined By The Industry Structure In Which It Competes.” Critically Evaluate This Statement.

4509 words - 18 pages that the industry has to face (PESTLE), whereas in the second section Porter's five forces analysis will be used to examine whether the competitive position of a company is determined by the industry structure in which it competes.Part 1: Strategic assessment of the generic pharmaceutical industry in GreeceDuring the last years the generic market in Greece has exhibited great growth. More specifically, in 2002 out of the 20 most profitable

Business Strategies For A Media Company

1377 words - 6 pages Business strategies and opportunities in the global T.V. industry for Aston Media Ltd S.U. Business Consultants.Report author: Sapheer Ullah(Bsc hons.) Date of submission: Table of contents: Summary Introduction Summary The objective of this report is to select a generic strategy most suited to Aston Media. In order to develop such a strategy we need to develop a concise analysis of the company in question and the environment it operates in. It

Future Of "Big Pharma" Essay

2421 words - 10 pages strategies. In line with the growing threat, an ever expanding of patent and generic defense strategies have evolved in aiding pharmaceutical businesses extend their patent life spans and maintain brand equity.Satellite Problems:- Most of financial and efforts in Research and Development developing blockbuster drugs with sales of US$1 billion or more, and not as much sale on marketing effort behind smaller, existing products. Thus created