Strategic Management Report: Porter's Generic Strategy and Examples

This report examines Porter's Generic Strategies, a framework for achieving competitive advantage. It explores three main strategies: Cost Leadership, Product Differentiation, and Focus strategies (including both Cost Focus and Differentiation Focus). The report defines each strategy and provides real-world examples to illustrate their application. For Cost Leadership, it highlights Redbox and Walmart; for Product Differentiation, Apple is examined; and for Focus Differentiation, TOMS is used as an example. The report also includes references to academic sources that support the analysis. This report is designed to provide a clear understanding of how companies can strategically position themselves in the market to achieve success.

Strategic Management

Contents
PORTER GENERIC STRATEGY SUPPORTED BY REAL LIFE EXAMPLES............................................................3
FOCUS COST LEADERSHIP....................................................................................................................3
COST LEADERSHIP....................................................................................................................................3
PRODUCT DIFFERENTIATION..............................................................................................................3
FOCUS DIFFERENTIATION............................................................................................................................4
REFERENCES:...........................................................................................................................................5

PORTER GENERIC STRATEGY SUPPORTED BY REAL LIFE EXAMPLES
FOCUS COST LEADERSHIP
The companies which attempts the focus cost leadership strategy is redbox which is a major
DVD rental company. There are many other ways to watch movies even at low rates like through
Netflix and flat fee streaming but the redbox facilitates accurate level of low price and a broad
level of convenience to the users. The firms basically aims to gain a competitive advantage with the
help of product innovation and brand marketing through these generic strategies in order to stay ahead in
a competition across a global environment. An aimed strategy must target market segments which are less
unsafe to the organisations or where the competition is weakest. The firms using the focused strategy
involves southwest airlines, which gives point to point flights in contrast to the hub.(Parnell 2013).
COST LEADERSHIP
The companies which are attempting the highest market share position to gain cost advantages
comes under the porter’s cost leadership generic strategy. Low cost strategies are regarded as the
best cost strategies as it is claimed that low cost strategy is often rarely able to provide a
competitive advantage. A firm which is following the cost leadership strategy provides the
products or services with good quality and encourages a wide series of customers at a very low
price. This combination of good amount of price and value is often termed as strong value
proposition. For instance a company, payless shoesource sells off the brand name shoes at
inexpensive rate. So the firms involved in cost leadership strategy targets in combining low per
unit gain with large number of sales to make a good profit. Moreover the most famous cost
leader company is Walmart. Walmart has the highest number of customer base of any firm in
north America. These generic strategies by porter also facilitates a broad starting point for
strategic decision making.( Merchant 2014)
PRODUCT DIFFERENTIATION
Discussing about the product differentiation companies apple is one of the most known brands.
The company had led a remarkable impact on the consumer electronics and computer software
industry. Apple is also being considered as one of the big tech companies it comes among the big
five which is amazon, google, facebook and Microsoft. Companies which are attempting a
differentiation strategy gains the market share by providing entirely different factors which are
appreciated by the customers and the focused strategies includes in winning the cost leadership
or differentiation under the markets in the ways which are unavailable to more broadly focused
players.( Chaimankong and Prasertsakul 2012.)

FOCUS DIFFERENTIATION
It is the strategy among the two focus strategies which fulfills the requires needs of the market by
providing the different factors. Few of the firms which follows the focused strategy pays
attention towards specific sales channels, such as selling over the internet only. The example of a
companies using the focus strategy includes the TOMS, frog box and ten tree apparel which aims
to a particular narrow market consumers. TOMS is a popular known shoe company which is best
known for its tremendous corporate social and environmental stewardship.( Kinyuira 2014)

REFERENCES:
Books and journals:
Merchant, H., 2014. Configurations of governance structure, generic strategy, and firm size: Opening the
black box of value creation in international joint ventures. Global Strategy Journal, 4(4), pp.292-309.
Parnell, J.A., 2013. Uncertainty, generic strategy, strategic clarity, and performance of retail SMEs in
Peru, Argentina, and the United States. Journal of Small Business Management, 51(2), pp.215-234.
Kinyuira, D., 2014. Effects of Porter’s Generic competitive strategies on the performance of Savings and
Credit Cooperatives (Saccos) in Murang’a County, Kenya. Journal of Business and Management, 16(6),
pp.93-105.
Chaimankong, M. and Prasertsakul, D., 2012. Impact of strategy implementation on performance of
generic strategy: Evidence from Thailand. The south east Asian journal of management.