Leadership Strategy and Innovation: Porter's Framework Analysis

This report analyzes Unilever's business strategy through the lens of Porter's Generic Strategies framework to evaluate its competitive advantage. It begins by outlining Porter's generic strategies—cost leadership, differentiation, and focus—and assesses how Unilever employs a differentiation strategy to distinguish its products and services in the global market. The report then critically evaluates the advantages and disadvantages of Porter's strategic framework, highlighting its strengths in building market relations and improving pricing structures, while also addressing limitations related to demand, growth, and globalization. Finally, it offers recommendations to overcome these limitations, emphasizing the importance of selecting the best-fit strategy to enhance market competitiveness and sustainable growth. The analysis is supported by diagrams and tables, underscoring the framework's applicability in achieving profitability and competitive advantage in the global market. Desklib provides access to similar solved assignments and resources for students.

Leadership Strategy and
Innovation

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
1. Analysing the business strategy by using porter's generic competitive strategies framework 4
2. Critically evaluating the advantages and disadvantage of the porter's strategic framework
and recommendations to overcome.............................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Leadership strategy is defined as the map that used to align the investment in the
development of the leadership by having the goals, strategies and the aspirations to the business.
Leaders have the big role in order to adopt and make the employees to adopt the innovation in
the organization. The leaders used to stimulate the innovative results by having the new ideas
from the individuals in the organization. This report is based on the Unilever Plc. which is the
British multinational consumer goofs having its headquartered in London, England. The
company used to produce variety of products like food, ice creams, condiments, minerals and
other supplements. This organization is the second largest firm in order to produce the soap. The
current report will outline the porter's generic competitive advantage in order to determine the
organization's business strategy to evaluate the competitive advantage. This will be described by
using the diagrams and tables in order to describe the analysis of the organization. Further this
report will outline and critically evaluate about the porter's generic strategic framework by
evaluating its advantages and limitations and at last it will evaluate the three recommendations to
overcome from the limitations of this strategic framework.
MAIN BODY
1. Analysing the business strategy by using porter's generic competitive strategies framework
Porter's Generic strategic is the model which used to determine the profitability and
productivity of the organization. If the company is earning the above average profit in the long
run than the company is having the competitive advantage (Bolatan, Giadedi and Daim, 2022).
There are three generic strategies that helps the industry to gain and achieve the performance in
the competitive market. Three strategies are as follows:
a) Cost leadership: In the cost leadership, the entity used to set out itself as the low cost
producing producer in the industry. The cost structure of the company varies and depends on the
share and size of the market (Islami, Mustafa and Topuzovska Latkovikj, 2020). By producing at
the low cost it makes the fie to increase their productivity and gain the competitive advantage in
the market. If the company is achieving and sustain the cost leadership than the industry will be
having the above average profit.
b) Differentiation: In the differentiation strategy, the firm wants to be unique in the
industry and gain the competitive advantage in the market (Firoz Suleman, Rashidirad and Firoz
Suleman, 2019). The products are more exclusive which attracts the customers and increases the

competition in the market. In order to use this strategy the company must do the better research
and development, innovation and have ability to deliver the best quality. As it is important to
become flexible and adopt the innovation in the changing market.
c) Cost focus strategy: This strategy is basically the evolution of Cost leadership strategy.
The companies who use the differentiation strategies must also apply the focus strategy as well.
This strategy is best for the small company who wants to avoid the competition in the market and
working as individuals (Abdolshah, Moghimi, and Khatibi, 2018). In order to be focused the
company used to have direct focus on the target markets. The entity usually focus to gain the
competitive advantage by having the innovation in their products and services rather than having
the efficiency. The company must have differentiation focus that makes the organization to have
differentiation in the segments of the market. The another focus is on cost which is known as
cost focus. It elaborates that the company must have focus on the cost which helps them to
increases the profitability in te competitive market.
From the learning of the case study it is seen that the Unilever using the differentiation
strategy which helps the organization to grow and lead in the market. The differentiation strategy
helps the company to differentiate their products and services in order to compete in the market.
The differentiation strategy is the best and appropriate method where the target customers
segment is not sensitive related to the price. As it is the big company this strategy will be the
most suitable strategy for the firm (Ali and Anwar, 2021). In order to apply this strategy the
company has to focus on the various functional groups which are marketing, purchase, finance
inventory, etc. The cited organization uses the broad differentiation as the generic strategy for
gaining the competitive advantage which makes the company and its products to stand against
their competitors. The company used to produce different and variety of products and sell it
products in the global market, so they use this strategy. This makes the company to have the
flexible pricing and to provide he products at the nominal rates.

By investigating this it makes to know that the company is having the increasing profits
and the annual report of the company is also showing the positive results. As from the above
graphs of the profit shows that the company is having the good profits which helps the company
to grow and gain the competitive advantage in the market. The differentiation strategy is best and
appropriate strategy which makes the positive annual report of the company. The differentiation
strategy helps the cited organization to differentiate its products and services from the other and
also helps to gain the competitive advantage in the market.
By using this strategy the company is earning the good profits and this makes the
company to provide the good remuneration to their employees worldwide. The company has
continuous discussions with their shareholders in order to consult and to grow in the global
market. By using this strategy the company has new policy for their employees in order to
provide the remuneration which helps in increases the productivity of the cited organization.
2. Critically evaluating the advantages and disadvantage of the porter's strategic framework and
recommendations to overcome
Porter's Generic competitive advantage is the model which used to determine the
profitability of the business. If the company is having the above average profit in the long term
than the company is having the competitive advantage in the market (Lauer, 2019). This strategic
framework is the most useful tool which will help the company to manage the operations,
increases the growth and profitability of the business, develops the competitive advantage in

order to have substantiality in the market. The advantages and disadvantages of the porter
strategic framework is described below:
Advantages
1. Helps to build strong relation with target market: For having the successful, the
business must focus on any of the best strategy which will help the organization to
have strong relation with their target market. This used to have the good relation
with the customers as the company will focus on the best strategy which helps
them to grow in the market.
2. Improves pricing structure: When the organization used to ficus on the customers
it improves the pricing structure (Lee, Hoehn‐Weiss and Karim, 2021). If the
organization is having high customer bas it can charge the high prices, as it all
depends on which strategy is adopted by the company.
3. Helps in identify the future customers: The strategies of this framework helps the
company to identify their future customers with the specificity. By this it makes
easy for the organization in order to create the awareness of the new product in
the market. By using this framework it makes the company to grow and gain in
the competitive market and gain the competitive advantage.
4. Improves the customer services: This is the best way to gain the competitive
advantage by focusing and having strategies in order to satisfy the customers.
This framework will help the company to choose the best strategy according to
their organization and helps them to gain the competitor advantage in the market.
5. Helps to restore the reputation: By suing the differentiation strategy it makes the
organization to have variety of products for their customers. By using this
strategy it makes the firm to restore the reputation in the competitive market. This
used to create the advantage with the targeted market as current customers will be
the future customers for the company.
6. Provides better quality of management: By having the proper management by
using this model it helps the company to produce and provide the better quality of
products and services to the customers. It creates the opportunity by having the
goof management to provide the higher quality of services and increases the
interest of customers.

Disadvantages
1. Limit the demand and growth: Working with the same type of strategy can limit
the profitability of the organization. If the organization is working with the same
strategy it minimizes the productivity ad affects the demand. By this it may
decrease the reputation of the firm.
2. It can limit future growth: If the organization is using the specific strategy of this
framework it may face the difficulty in the expansion (Karyani and Rossieta,
2018). As the company use this framework in order to get new and innovative
opportunities so this may affect the growth of the entity.
3. Impact on globalization: The porter's generic framework give the organization
four type of strategies which helps them to grow. But these strategies has a great
impact in order to globalize the business. As if the firm is using the strategy of
cost leadership than the organization will be more focused on the cost and will not
do the advertising in order save the cost.
Recommendations to overcome
Porter's generic strategy model is basically depends on the three strategies that are
available to the firm sin order to gain the competitive advantage in the market. As by using this
model the organization may faces and fail in order to sustain the best strategy. There are some
drawbacks of these strategies and in order to overcome from the above stated limitations some
recommendations are as follows:
1. By using the best and relevant strategy the company can use this model which
helps the company to grow in the market. This will help them to increase the
demand and growth and to gain the competitive advantage.
2. By choosing the best strategic model it will increase the future growth and helps
to achieve the sustainable growth and gain competitive advantage.
3. This model has different strategies this will help the company to gain the
competitiveness in the market (Bhattarai, 2018). All three strategies are the best
and the organization should choose the relevant strategy in order to grow and
focus on the segments of the markets.

CONCLUSION
The above report has evaluated about the strategic framework of Unilever organization.
As it is concluded about the porter's generic strategic framework which has determined the
organization's business strategy to evaluate the competitive advantage. By having the
competitive advantage it will help the organization to earn the profitability in the competitive
market. It is concluded from the above that the company must use the best strategic model in
order to have the competitive advantage in the competitive advantage. The porter strategic
framework is consisted of the three strategies which are cost differentiator, cost leadership and
focus. This framework is evaluated and described by using the diagrams and tables in order to
describe the analysis of the organization. Further this report has described and critically
evaluated about the porter's generic strategic framework by evaluating its advantages and
limitations and at last this current report has evaluated about the three recommendations to
overcome from the limitations of this strategic framework. By focusing on this recommendation
it may help the organization to focus on the problems of the external environment. As porter
believes that these strategies will help the organization to grow and gain the competitive
advantage in the global market.

REFERENCES
Books and Journals
Abdolshah, M., Moghimi, M. and Khatibi, S.A., 2018. Investigating competitive advantage in
banking industry based on Porter's Generic strategies: IRANs newly-established private
banks. International Journal of Applied Management Sciences and Engineering
(IJAMSE). 5(1). pp.52-62.
Ali, B. J. and Anwar, G., 2021. Porter’s Generic Competitive Strategies and its influence on the
Competitive Advantage. Ali, BJ, & Anwar, G.(2021). Porter’s Generic Competitive
Strategies and its influence on the Competitive Advantage. International Journal of
Advanced Engineering, Management and Science. 7(6). pp.42-51.
Bhattarai, D., 2018. Generic strategies and sustainability of financial performance of Nepalese
Enterprises. Pravaha. 24(1). pp.39-49.
Bolatan, G. I. S., Giadedi, A. and Daim, T., 2022. Innovation leadership through technology
transfer: Case of Turkish industry. Technology in Society. 68. p.101909.
Firoz Suleman, M., Rashidirad, M. and Firoz Suleman, S., 2019. The applicability of Porter's
generic strategies in pure online firms: A case study approach. Strategic Change. 28(3).
pp.167-176.
Islami, X., Mustafa, N. and Topuzovska Latkovikj, M., 2020. Linking Porter’s generic strategies
to firm performance. Future Business Journal. 6(1). pp.1-15.
Karyani, E. and Rossieta, H. R., 2018. Generic strategies and financial performance persistence
in the banking sector in Indonesia. Management & Accounting Review (MAR). 17(1).
pp.79-96.
Lauer, T., 2019. Generic strategies, outpacing and blue ocean-discussing the validity of three
strategic management theories using case studies from airlines and grocery
retail. Theory, Methodology, Practice. 15(1). p.57.
Lee, C. H., Hoehn‐Weiss, M. N. and Karim, S., 2021. Competing both ways: How combining
Porter's low‐cost and focus strategies hurts firm performance. Strategic Management
Journal. 42(12). pp.2218-2244.