In: Operations Management
Define and discuss Porters’ Generic Strategies
There are three generic strategies that businesses can make use of that can be differentiated based on the underlying assumptions of each:
LOW-COST LEADERSHIP
Employed by companies like Walmart, this strategy creates an
understanding of building a supply chain around the factors of
optimization where the lowest cost for a product can be offered in
a market, [providing competitive abilities to a company with the
necessary characteristics.
DIFFERENTIATION
Employed by companies like Ducati, whereby the customer is not just
purchasing a product but an experience. The product is considered a
luxury offering, priced higher than the industry and competition.
The products and companies in this strategy set itself apart from
the competition, often involving the high cost of development.
FOCUS
Employed by companies like Tesla, whereby the products and offer
cater to a niche market where the company can then dominate through
its catered approach to both market development, customer
satisfaction and even low pricing.