Generic Competitive Strategies

This assignment explores Porter's three generic competitive strategies: cost leadership, differentiation, and focus. It defines each strategy and provides examples of how companies can implement them. The assignment also discusses the challenges associated with each strategy and offers insights into successful implementation.

INTERNATIONAL BUSINESS

Table of Contents
Q.1 Examining the major structural features of the industry...........................................................3
Q. 2 Examining the ways in which the organization resources and capabilities provide
competitive advantage.....................................................................................................................3
Q. 3 Discussing how the way in which the firm is structured affects its ability to operate within
this industry......................................................................................................................................4
Q. 4 Discuss the generic strategy being pursued by the firm with respect to this product line.......4
REFERENCES.....................................................................................................................................6

Illustration Index
Illustration 1: Genric strategy...............................................................................................................6

Q.1 Examining the major structural features of the industry
There are many structure features like market size, investments and government initiatives
in oil and gas industry of India.
Market size: There are many oil and gas companies like ONGC (Oil and Natural Gas Corporation),
IOCL (Indian oil corporation limited) and Reliance which sell products like petrol and diesel to
Indian consumers. Market size of oil and gas industry has increased in comparison with previous
years due to high demand. In addition to this, ONGC has control over upstream segment
(exploration and production) which contributes 68 percent towards country’s total oil output as per
data of 2014. Further, IOCL also works for 11214 network of crude oil, gas as well as product
pipeline with capabilities of 1.6 MBPD (Million Barrels Per Day) (Oil and Gas Industry in India,
2016). As per research, this is approximate 30 % of country pipeline network. Indian oil corporation
limited is largest company of as per sales largest sales of oil and gas products in Indian market.
Investments: As latest research, investment in oil and gas sector are increased as compare to
previous years in Indian market. It contribute effective role for effective development of Indian
economy as comparison of past years. For example, IOCL targets to enhance the capacity of its
Panipat refinery by 34 per cent and it will invest of US$ 2.38 billion by 2020 (Our Business, 2016).
In addition to this, management of organization also plan to increase capacity of many other
refineries in India.
Government initiatives: They take many initiatives for development and meet out consumption of
oil and gas products for Indian consumers. For example, Government of India takes many steps for
bilateral discussion with Norway to increase co-operation between the two nations in the area of oil,
hydrocarbon exploration and natural gas. (Oil and Gas Industry in India, 2016).
Q. 2 Examining the ways in which the organization resources and capabilities provide competitive
advantage
Generally IOCL has many resources and capabilities which provides effective competitive
advantages. In addition to this, organization has covered large area for refining and manufacturing
of crude oil and gas products. corporation has many oil and gas filling stations which increases sales
of its products. This approach contribute effective role for IOCL to achieve better competitive
advantages in the market. Further, management of Corporation takes its candidates from top
institutes of India by conducting proper exam (Hemmati and et.al., 2016). This selection and
recruitment process aids organization to select skilful and talented applicants to manage its
operations. So these employees aid the IOCL to develop better strategies which contribute
effectively to gain better competitive advantages.
In addition to this, organization has effective core competency to refines and manufacture oil

and gas in the Indian market. This skill also helps firm to meet out demand of consumers by
providing sufficient oil and gas products. It aids the IOCL to increase its market share which guides
to achieve better competitive advantages in the market of India. Further, management of
organization use latest IT tools and techniques like ERP (Enterprises resources management) to
manage its business activities across country (Doh, Luthans and Slocum, 2016). This approach
contribute effectively role for management of IOCL to get better rival advantages by developing
effective strategies and plans regarding profit and revenue generation.
Q. 3 Discussing how the way in which the firm is structured affects its ability to operate within this
industry
Generally IOCL is come under public sector and maximum shares are contained by
government of India. Further, organization uses effective hierarchical structure to manage its
operations. Firm gets positive impacts due to usage of this approach at the work place. Staff
members realise huge reliability to report its superiors due to clear chain of demand in the IOCL.
This process also aids employees and managers to clear their doubts regarding projects in the
organization. It contribute effective role for organization to increase its efficiency and performance
in oil and gas industry of India. Hierarchical structure aids the firm to divide its operations as per
departments. For example, management of IOCL divide its operations in various divisions like
account, sales as well as production which provide huge reliability to handle its business activities
in the Indian market (Dontigney, 2016). In addition to this, hierarchical structure also helps the
management of organization to clear communication of staff members and managers. This method
also aids the staff member to take proper guidance and task to manage day to day work in the IOCL.
On the other side, hierarchical structure has also negative effect which affect the operations
of company. It demotivate the staff members because employee has no authority to take any type
decisions which reduce its innovative skills in the IOCL. Further, It affects the efficiency and
performance of staff members in the organization.
Q. 4 Discuss the generic strategy being pursued by the firm with respect to this product line
Porter generic strategies are used by organizations to take effective competitive advantages
in the market. It is described below the paragraph.
Cost leadership strategy: As per suggestion, management of IOCL use cost leadership strategies to
sell its oil and gas products in the Indian market. According to this approach, management of
corporation follows market oriented pricing strategy to increase its sales of oil and gas products. In
addition to this, it contribute effective role for IOCL to achieve effective market share in the market
(Porter's Generic Competitive Strategies, 2015) In addition to this, financial performance of
organization is also appropriate and it has lot of distribution channels which contribute effectively

to increase better profit as comparison of competitors like reliance and ONGC.
(Source:Porter's Generic Competitive Strategies, 2015)
Differentiation strategies: It involves in making products or services different and attractive from
competitors. It contains many features of products and services like functionality, durability, support
and brand image. To make successful strategy, organization has to posses with many qualities like
good research, development and innovation of attractive products.
Cost focus strategy: Cost focus strategy is used by those organizations which work in niche
segments. Further, it develops and design their products and services as per the requirement of
consumers (Buckley, 2016). In addition to this, organization sales its products in a lower cost to
increase its sales which help to gain better profit in the market.
Illustration 1: Genric strategy

REFERENCES
Books and journals
Buckley, P.J., 2016. The contribution of internalisation theory to international business: New
realities and unanswered questions. Journal of World Business. 51(1). pp.74-82.
De Deyne, S., Verheyen, S. and Storms, G., 2016. Structure and organization of the mental lexicon:
A network approach derived from syntactic dependency relations and word associations.
Towards a Theoretical Framework for Analyzing Complex Linguistic Networks. pp. 47-79.
Doh, J.P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015: Perspectives
on the 50th anniversary issue of the Journal of World Business: Introduction to the special
issue. Journal of World Business. 51(1). pp.1-5.
Hemmati, M. and et.al., 2016. Development of fuzzy two-stage DEA model for competitive
advantage based on RBV and strategic agility as a dynamic capability. Journal of Modelling
in Management,11(1).
Perri, A. and Peruffo, E., 2016. Knowledge spillovers from FDI: a critical review from the
international business perspective. International Journal of Management Reviews. 18(1).
pp.3-27.
Online
Dontigney, E., 2016. [Online]. Available
Through:<http://www.ehow.com/info_8536984_advantages-disadvantages-hierarchical-
structure.html>. [Accessed on 11th March 2016].
Oil and Gas Industry in India, 2016. [Online]. Available Through:<http://www.ibef.org/industry/oil-
gas-india.aspx>. [Accessed on 11th March 2016].
Our Business, 2016. [Online]. Available Through:<https://www.iocl.com/AboutUs/Business.aspx>.
[Accessed on 11th March 2016].
Porter's Generic Competitive Strategies, 2015. [Online]. Available
Through:<http://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>. [Accessed on 11th March 2016].