Strategic Management

The assignment content discusses Strategy Management, specifically Porter's generic competitive strategies, which include cost leadership, differentiation, and focus. The five forces that rule the competitive environment are threat of new entrants, intensity of rivalry in the industry, threat of substitute products, bargaining power of suppliers, and bargaining power of buyers. E-mart, a supermarket, faces threats from new entrants, intense rivalry, and substitutes. It has taken a cost leadership strategy to survive in the industry.

Running head: STRATEGY MANAGEMENT
Strategy Management
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1STRATEGY MANAGEMENT
Porter’s generic strategies
Porter’s model of generic competitive strategies was developed in the year 1980; it was
developed as a result of the research study conducted by Michael Porter. According to porter
Industries are made of many firms that also include close substitutes products. Five forces rule
the competitive environment’s structure (Ormanidhi & Stringa, 2008). The five forces are
 Threat of new entrants
 Intensity of rivalry in the industry
 Threat of Substitute products
 Bargaining power of suppliers
 Bargaining power of buyers
To understand this example of E- mart can be taken, if the analysis of the competitive
environment of E-mart is done, it will be see that the supermarket is facing threat from
the new entrants that might be entering the industry.
There is already too much rivalry because there are many other supermarkets like, Lotte
mart, Costco that are actively operating in this industry. To combat the growing online
buying habit of the target market E-mart has also come up with a website.
Substitute of E-mart are the retail stores, the local retail stores also offer the products that
are offered by E-mart.
Bargaining power of the suppliers of the supermarket is a disadvantage for the
organization. E-mart is forced to buy products that are of high cost from its suppliers.
Bargaining power of the buyers forces the supermarket to give discount and offers, if
they do not so, customers will switch to other supermarkets that offers discounts to the
customers and they get value for the price they paid ( Tanwar, 2013).
Tanwar, 2013
Differentiation Cost leadership
Focus
a) Differentiation focus, b) Cost focus c) Cost and
differentiation focus.

2STRATEGY MANAGEMENT
According to the porter’s model firms have, there are two dimensions of this model, strategic
advantage and strategic target. Competitive advantages are of two types, cost leadership, where
the firm’s gains advantage because of the cost involved production thus making them to gain
profit, another advantage is when the organization offers products or services that are different
from their customers. These dimensions create three alternatives cost leadership, focus which is
of three types, cost focus, differentiation focus or cost and differentiation focus (Moon et al.,
2014).
E-mart takes the cost leadership strategy for its survival in the industry that has many
other companies and is facing a very harsh competition (Moon et al., 2014).

3STRATEGY MANAGEMENT
References
Moon, H. C., Hur, Y. K., Yin, W., & Helm, C. (2014). Extending Porter’s generic
strategies: from three to eight. European Journal of International
Management, 8(2), 205-225.
Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of Business and
Management, 15(1), 11-17.
Ormanidhi, O., & Stringa, O. (2008). Porter's model of generic competitive
strategies. Business Economics, 43(3), 55-64.