Question

Explain briefly the five generic strategies suggestes by Prof. Michael Porter. Using an industry of your choice, describe two firms in that industry that use different generic strategies.

Answer 1

answer-

1- Porter's Generic Competitive Strategies-

porter provide a model in which firms can position itself within the industry by using thier competitive advantages which can be defined in following generic strategies-

1- COST LEADERSHIP-

firm can get the competitive advantage over its competitors by providing low cost products/services to customers in broad market area.the cost advantage can be gain by using advanaced technology, optimum use of resources, reduce wastage, improved quality etc.

2- PRODUCT DIFFERENTIATION-

another generic strategy is to use the differentiation strategy in which a firms has something uniques which its competitors do not have within the same industry.this could be unqiue feature of the product,unique process to manufacture the product/services etc. which other firms can not imitate easily.

3- THE FOCUS STRATEGY-

this strategy involves focus on the narrow market scope. in this firm focus on segment or group of segments in the industry & make its strategy according to that.

this strategy has following two generic strategy-

3A- focused cost leadership-

in this generic strategy a firm provides low cost products/services to target market or target segments.

3B- focused differentiation-

in this generic strategy a fim provide products with unique factor as per the need of the target segment.

describe two firms in that industry that use different generic strategies-

lets take XIAOMI inc. & SAMSUNG inc. in electronic & communication industry-

the samsung company is one the leader company in mobile phones. samsung uses the differentiation strategy in which it provide innovated products to customers like first big screen phone in note series, super amoled display which produces satutated natural colors & deep black & saves the battery consumptions.

now company is in the introducing world's first foldable screen which would be the breaktrough in the screen of phones department as always been the unique factor for samsung company.

company also adopts focus cost leaderhsip strategy to provide affordable phones to target market in narrow scope.

lets talk about the generic strategy of the XIAOMI inc.

XIAOMI is also manufactures phones & other electronic items but the it adopts cost leadership strategy by providing high end mobile phones at low cost.if we compare the pricing of samsung & xiaomi then xiaomi would be the winner in low price but high end phones to customers.

according to research, samsung has been the top choice of customers in buying the mobile phone in india but when xaiomi entered in india with its low price but good feature phone then it outrun the samsung.the mi note 4 of xiaomi has been the best selling phone in india.

* above answer is written in my own words. hope this answer would help you.good luck.