Analysis of Porter's Generic Strategies

This assignment requires an in-depth analysis of Porter's generic strategies, which are methods by which companies pursue competitive advantages in their chosen market. The document reviews several books and journals, including 'A Technical Evaluation, Performance Analysis and Risk Assessment of Multiple Novel Oxy-Turbine Power Cycles with Complete CO2 Capture' and 'The Impact of Generic Competitive Strategies on Organizational Performance'. It also explores the application of these strategies in various industries, such as the food and beverage sector, marketing management, and the diagnosis and management of chronic obstructive lung disease. The document aims to provide a comprehensive understanding of Porter's generic strategies and their significance in organizational performance.

Individual management report

Table of Contents
INTRODUCTION...........................................................................................................................1
PROJECT.........................................................................................................................................1
1 Macro environmental analysis and threats and opportunities which the company face.........1
2 Three modes of market entry...................................................................................................4
3 Concepts of market segmentation and targetting and evaluation of the potential target.........5
4 Porter's generic strategies.........................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Individual management can be defined as maintaining and using a satisfied workforce. Dr
Pepper is a publicly traded American soft drink beverage which has dual headquarter in
Massachusetts and Plano and Conglomerate. This study will cover all the macro environmental
factors that affect the company in its functioning and its activities. Political factors, legal factors,
social factors and another factors of that market and the country in which the company wants to
enter and expand its new products affect and impact it in negative manner and in positive
manner. It also shows some modes of entering in new market and the country like licensing, joint
ventures and exporting which helped the company in developing its new product in another
country (Barba and et.al., 2016). This report will include some strategies like cost leadership
strategy, differentiation strategy and focus strategies which also supports the company in having
competitive advantages across its chosen country and market scope.
PROJECT
1 Macro environmental analysis and threats and opportunities which the company face
When a company wants to expand its business in another country with a new products
then it has to face many problems. There are many factors that affects its functioning like
political factors, economic factors, social factors of that country which may be opportunities and
threat for the company. There are some soft drinks that Chinese people have such as: Carbonated
drinks, Pepsi, Coca cola, fruit juice drinks like Guolichang, Huiyuan etc. These factors can may
affect the company in positive manner and in negative manner. Dr pepper is soft drink beverage
manufacturer company which wants to enter in China. It serves and have almost 23 flavours such
as: cherry, cola, apricot, blackberry, caramel. Pepper, plum, orange, coriander juniper and so on.
The main products of its are Dr pepper and Dr thunder. Its products contains carbonated water,
sweeter and artificial flavouring. It wants to launch and promote its new products which will be
healthy. Factors not impact on the Dr pepper snapple group's competitive advantage and
profitability levels.
Social factors: Social factors consist of culture of society of the country in which the
company wants to enter and promote its new product. The way of doing things of that people
impact the culture of the company. Attitude and belief of the population play a vital role in the
marketer at the company. People of that country are becoming more health conscious and want
1

to consume only healthy products so it promotes healthy drink Kombucha whose ingredients
protects the body from oxidative damage. It also helps in weight loss so it is very good for those
who are very diet conscious. Educations level also impact on the company in positiver manner as
most of the people of china are educated so they understand the importance of healthy drink
(Phadermrod, Crowder and Wills, 2019). Kombucha have many benefits but on the other hand it
has some side effects like stomach ache, Nausea and dizziness. It also leads excess calorie
consumption and also can cause digestive distress.
Environmental factors: Different countries and different markets have different norms
of environmental standards. They have different environmental laws, climate change and
weather of that country. On the other hand it does not produce any type of pollution so these
factors may affect the promotion of this product in negative manner and in positive manner
(Bijeta and Sharma, 2018). It is Eco-friendly drink as it reduces carbon footprint and reuse the
same glass bottles many a times before recycling. This product or drink consist of bacteria that
confer health benefits to their host. A Kombucha lasts about 3 months in the refrigerator. The
bottle of Kombucha can be recycled and the company uses recycled glass bottles. These bottles
can be used after sanitizing with hot water. The main impact of environmental factors on this
company is on ground water levels. Weather conditions also impact on the ability of DR Pepper
snapple group as it has to manage the transportation of the resource and the finished goods which
may delay in the delivery dates of products. By recycling their soft drinks cans it helps in
sustainability and a better community. Dr Pepper is now working in order to reduce waste in
South West by recycling.
Legal factors: There are some legal factors also that affect the company's activity and its
functioning. Legal factors involves anti trust law of that country in beverages soft drinks
industry. Patent, copyright and employment law. Safety and health law can majorly affect in the
promotion of new product of Dr Pepper company. This products has not been proved safe so
safety law of that company can impact on this negatively (Li, Han and Gu, 2018). It should
evaluate all the factors before entering in this market because this may lead to theft of the
company's secret sauce.
Technological factors: Many countries and this modern world is adopting new and
advance technologies. The level of using technology of that country can impact and affect Dr
Pepper company in positive manner and in negative manner. From last 5 years this industry has
2

been transforming very fast. The company need to analyse the speed at which new technologies
are disrupting this industry (Schlegelmilch, 2016). It should understand the impact of Rate of
technological diffusion and impact of technologies on product offering by the company. This
company is using technologies for producing this product which may consume their time and
money. It can easily promote its new Kombucha product with the help and use of new
promotional ways and technologies.
Economic factors: Economic factors includes interest rates, inflation rate and saving
rates that helps in determining the aggregate demand and investment in an economy. There are
many economic factors of the country which Dr Pepper should consider before entering this new
market such as stability and exchange rate of host country currency, education level in the
economy, labour cost and skills level of workforce in this beverage industry of that country may
affect in negative manner and in positive manner (Laxmaiah and et.al, 2015). Changes in labour
cost may decrease and increase the profitability of the company. People can save money as it is
inexpensive and healthy substitute for devitalized beverages. A per economic view the average
income of the company is $ 37,742 to $ 106,514 a year. It has increased its revenue of 18.44 %
year on year. There are some potential factors that impact its customers and its business such as:
changes in the prices, consumer preferences and health issues related factors.
Political factors: Political factors also play a vital role when the company wants to
promote its new product in new country. Dr Pepper company has to face many problems while
promoting its product such as risk of military invasion, intellectual property protection. Trade
regulations and tariff of that country and anti trust laws of soft drinks beverage industry also
impact on its functioning. It requires proper labelling. Kombucha is beneficial for bone health
and inflammation. It also contains minerals and vitamins which is very good for the health. It
requires more research for proving it safe and beneficial (Chhabra and Kiran, 2015).
There are some opportunities and threats of this company which it can uses in promoting
its new products. It should also address its weakness and threats before entering in new market
and country for maximizing its profits and development its product. Value added tax has been
rose by 2.5% in 2010 that has increased chocolate and soft drink prices that directly impact the
company as it reduces its sales.
Opportunities: Dr Pepper company has many opportunities as it focus on sustainability
and corporate social responsibility that helps them in promoting healthy brand equity. It has huge
3

future potential in drink and health beverages market and also has scope for international
expansion. It can easily target those people who do not consume alcohol. Around 30% of
Chinese do not consume alcohol so for this it becomes easy to target that type of people. Most of
the people and adults consume less than 1 drink per week.
Many people are conscious about their health so health beverages are the future trend in
that market because there is a scope of introducing new product in domestic as well as
international market.
Threats: There are some weaknesses of this company which creates the barrier in its
growth and development. Some weaknesses and threats are development of technologies which
are using by its competitors that can affect its functioning. This company is operating in various
countries and also wants to promote new product in new country so it has to face the problem of
currency fluctuation that is a serious threat in medium to long term future. Rising pay level like
$15 per hour and increasing level in prices in the China also can lead a serious threat and
pressure on productivity and profitability of Dr Pepper company.
Solutions of these problems: For solving and eliminating these problems it should
analyse all the factors like employment and labour law of that country, inflation and tax rates. It
should also use new and advancement of technologies for being in a competition and also for
promoting its products. For that it can use the best promotional way and make the best strategies.
It can also identifies the market and social trends of that particular market and country (Choi and
Kim, 2015).
2 Three modes of market entry
There are many modes of entry in new markets. Dr Pepper wants to enter in China with
its new product Kombucha healthy drink. Aim of this company is to earn profits by attracting
new and potential customers and also wants to create and make a good image of its products for
its customers and in the market. The main three modes of enter in the market are: Exporting,
Joint ventures and licensing or franchising.
Exporting: Exporting is the best and easiest way of entering in the new market. Most of
the companies prefer and uses this mode of entry because it is fast mode and has low risk. The
main advantage and benefit of choosing this mode is the company can avoid the expenses of
establishing its operations in the new country. This type of business and entry can be done
through contractual agreements with a local distributor. When the company export its goods it
4

must export its products with proper labelling, pricing and packaging. In this type of mode the
company also require the best marketer which can help them in promoting and developing its
product in the new market (Fozer and et.al., 2017). There are some disadvantages also of
exporting like the cost of transporting of products and goods to the country that may be high and
also can impact on the environment in negative manner. Some countries impose tariffs on
importing goods that can decrease profit and also increase the overall cost of the company. By
exporting products Dr Pepper can have less control over its operations and also must pay a fee to
their distribution partner for those services.
Joint ventures: Joint ventures is another way of entering in the new market. In this type
2 or more than 2 investors share ownership and have the right of controlling over business
operations and property. Disadvantage of this type of mode is it is more expensive form than
exporting and licensing. Partners of this venture do not have full control over management. All
the partners have different views on determined and expected benefits. It has some advantages
also like owner of this ventures can share risk which is beneficial for all the partners.
Licensing: Licensing is another way of entering in the new market. In this type the
company like Dr Pepper which is also called who wants to promote its new product in the new
market is also called licensor sells its right to use intellectual property and also produce the
company's product to the licensee. This is governed by contract law and registration is nit
necessary. In this type licensor has the control on using its intellectual property by the licensee
but does not have control on the licensee's business.
Exporting is the most appropriate: As compared to licensing and joint venture
exporting is the best and appropriate mode for Dr pepper company as it wants to develop its new
product and wants to enter in another country. It has many benefits like with the use of exporting
method the company can increase its sales as it is less expensive and also make much profit. It
also reduces and lower cost of the company because the company does not require to hire new
employees and also does not need to purchase machine. It can utilize existing staff, factory and
machine in effective manner (Phadermrod, Crowder and Wills, 2019).
3 Concepts of market segmentation and targetting and evaluation of the potential target
Segmentation: Segmentation means to divide group of people of the particular area and
market on the basis of age, gender, income and status. Segmenting the market helps the company
in identifying people in better way of different segments. It is also the easiest and the best way
5

of achieving and approaching to customers. By segmenting market the company can take
competitive advantages. For segmentation the company need to target its market as it wants to
expand its new product in China so it is important for them to target their market for attracting
more customers (Pham, 2016).
There are some types of market segmentation such as: geographic, demographic,
firmographic, behavioural segmentation. In the type of geographic segmentation companies
divide the markets on the basis of geography. This type of segmentation helps companies in
identifying customers and groups who in particular area of group and region and have similar
features like climate, weather and so on. Those companies which use Demographic segmentation
they divide the market on the basis of status, family size, income, gender and age. With this
segmentation companies can easily identify the tastes and needs of customers.
Some companies segment their market on the basis of audience's behaviour, choices,
preferences and decision-making capacity. In this type of segment companies divide their people
into those who already know about the services and products, into ex users, potential users,
current users and first time users. The another type of segmentation is psycho-graphic. In this
type companies divide their audience on the basis of their lifestyle, personality and attitude.
Lifestyle and personality influence and impact the purchasing decision of a person to a great
extent.
Macro and micro segmentation are also process of dividing the whole market into different group
on the basis of people's different variables. Macro segmentation is narrow in scope than micro
segmentation.
Micro segmentation: Micro segmentation is the method of dividing the larger group of
information on the basis of their characteristics, conditions and attributes. These divide thee
group of people on the basis of customer oriented variables like their experience and benefits.
Macro segmentation: This type of segmentation is based on different variables like
broader scope of organisational and industry variables. Variables like the size of the company
help in estimating the buying capacity and buying size of the company. It is always broader in
scope as compare to micro segmentation.
Targetting: After segmenting and dividing group of people, the company requires to
target each segment and group. It is on process from segmentation and this process determine the
select market. After segmentation the company requires to identify that if they can meet the
6

needs of their one or more segments or not (Pokhrel and Khanal, 2018). The strategies of
competitors of meeting the needs and demands of their particular segment. The advantage of
choosing demographic segmentation and targetting is it helps the company to target the right and
potential audience that also reduces unnecessary impressions. The main aim of the company of
demographic targetting is attract the potential audience on the shared traits as it also clearly
defines personal traits.
Positioning: It is the final stage that is important for following after segmentation and
targetting the group. In positioning process, the firm focuses on the aspects of the services and
products that can fulfil and satisfy all the needs and demands of targetting customers. A good
positioning in the market makes the product unique. It also allows flexibility to the product and
brand of the company in extension, advertising and distribution.
Potential target market and recommendation:
As a senior marketing consultant it can be suggested to the company to focus on
demographic segmentation on the basis of age, gender, income and education. It wants to
promote its healthy drink Kombucha so its main target is adult and 18-40 age of people. The
main advantage of demographic segmentation is that the company can easily get the
informations which it wants. The another main advantage of this type of segmentation is
customer loyalty and retention because the company focus on its target market and customers
and spend much time in identifying their needs and demands (Pulaj, Kume and Cipi, 2015).
It is important and beneficial for Dr Pepper company as it helps them in understanding
the ideal and potential customers. It can also easily measure the needs and demands of same type
of customers than other types of variables. It also helps them in increasing sales as marketer only
focus on particular segment and make efforts to most likely to buy.
4 Porter's generic strategies
Every type of company make the strategies in order to achieve their determined goals.
There are mainly 4 types of porter's generic strategies such as: Cost focus, cost leadership,
Differentiation and differentiation focus.
Cost leadership: With the help of cost leadership strategy companies focus on taking
competitive advantage by reducing and having the lowest cost of operations in the same industry.
The main motive of using this strategy is to increase efficiency and reduce the production costs
from the company's closest competitor (Schlegelmilch, 2016). It is the best and important
7

strategy because it concentrates on producing the less expensive products in the market. With the
use and help of this strategy the company can also increase the buying power of customers which
can directly help them in increasing their sales.
Differentiation: Differentiation strategy make the company's products differ from its
competitors and the same industry's products. With the help of this strategy the company can
gets success in order to create unique image in the market and the country in which it wants to
develop its new product. The company can make its products different from others by increasing
product performance and innovation (Choi and Kim, 2015).
Cost focus: Cost focus strategy uses the principles of cost leadership. The main aim of
using this strategy is to being the niche leader and also focus on 1 specific market niche. The
company can get the opportunity by using the principles of cost leadership strategy and become
the major player within the niche (Fozer and et.al., 2017).
Differentiation focus: Differentiation focus is same as cost focus strategy. This strategy
is suitable for large and the biggest companies and are not appropriate for small companies. It
also has the different and unique products and focuses on narrow customer segment (Vogelmeier
and et.al., 2017).
Recommendation for selecting strategy: As a senior marketing consultant it can be
suggested to Dr Pepper company to use cost leadership strategy. Cost leadership is very
important for the company because it wants to develop and promote its new healthy drink
Kombucha so it will be beneficial because this strategy focuses on winning market shares by
providing its quality products and services at affordable and lower prices than their competitors.
When the company provides its the highest quality products on reasonable [rice then it tends to
attract more potential customers towards its products and the company. By attracting more
customers and using this strategy it can increase their sales and profitability (Wicker and et.al.,
2015).
CONCLUSION
From the above study it has been concluded that macro environmental factors played a
vital role and affected the company in its growth in negative manner and in positive manner.
There are different modes of entering in the new market like licensing, joint ventures and
exporting that also impacted the company when it wanted to expand its business and promote its
8

new products in another country and market. For developing and expanding business the
company uses market segmentation and targetting which supported them in easily attract
potential customers. Porter's generic strategies consisted methods by which the company pursue
competitive advantages in its chosen market and the country.
REFERENCES
Books and journals
Barba, F.C. and et.al., 2016. A technical evaluation, performance analysis and risk assessment of
multiple novel oxy-turbine power cycles with complete CO2 capture. Journal of cleaner
production. 133. pp.971-985.
Bijeta, K.T. and Sharma, A., 2018. Effect of growing media and plant spacing on soil and plant
nutrients under protected cultivation in sweet pepper. IJCS. 6(6). pp.2194-2198.
Chhabra, S. and Kiran, R., 2015. An Empirical Analysis of Total Factor Productivity in Food and
Beverage Sector. Productivity. 56(2).
Choi, C.S. and Kim, K.H., 2015, June. Marketing management in social network platforms:
segmentation, targeting, and positioning. In 2015 Global Fashion Management
Conference at Florence (pp. 97-102).
Fozer, D. and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production. 147. pp.75-85.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Pham, T., 2016. The role of emotional branding in the creation of an engaging brand: a case
study of Dr. Thanh Thuy’s private clinic.
Pokhrel, P. and Khanal, A., 2018. Report on Stress Management. Crisis, 1.
Pulaj, E., Kume, V. and Cipi, A., 2015. The impact of generic competitive strategies on
organizational performance. The evidence from Albanian context. European Scientific
Journal, ESJ. 11(28).
Schlegelmilch, B.B., 2016. Segmenting Targeting and Positioning in Global Markets. In Global
Marketing Strategy(pp. 63-82). Springer, Cham.
9

Vogelmeier, C.F. And et.al., 2017. Global strategy for the diagnosis, management, and
prevention of chronic obstructive lung disease 2017 report. GOLD executive
summary. American journal of respiratory and critical care medicine. 195(5). pp.557-
582.
Wicker, P. and et.al., 2015. The effect of Porter’s generic strategies on organisational problems
of non-profit sports clubs. European Journal for Sport and Society. 12(3). pp.281-307.
Laxmaiah, A. and et.al, 2015. Socio-economic & demographic determinants of hypertension &
knowledge, practices & risk behaviour of tribals in India. The Indian journal of medical
research. 141(5). p.697.
Li, Z., Han, C. and Gu, T., 2018. Economics of biomass gasification: A review of the current
status. Energy Sources, Part B: Economics, Planning, and Policy. 13(2). pp.137-140.
10