Strategic Management Report: Porter's Generic Model Developments

This report provides an in-depth analysis of the evolution and developments within Porter's Generic Model, focusing on changes occurring both within and after 1996. It examines how the model, initially centered on cost leadership and differentiation, has adapted to the dynamic shifts in the business environment, including the impact of the internet and evolving consumer behavior. The report discusses the critiques of the model and the introduction of strategies like value-based and access-based approaches to maintain its effectiveness. It also explores how the resource-based view of the organization has influenced the model, emphasizing the importance of strategic resource allocation. The analysis incorporates perspectives from various researchers, including Bowman, Faulkner, and Parnell, to illustrate the model's transformation from a typological orientation to a more organization-specific framework, and its adaptation to flexible strategies like Bowman's Strategy Clock. The report concludes by highlighting the importance of these modifications in helping businesses address contemporary market challenges and achieve competitive advantage through strategic decision-making.

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The development of organizations is based on the strategic management initiatives of the
governance bodies and the manner in which the internal and external environments are assessed
by the management bodies. Safón (2007) stated that the porter’s generic model helps
organizations in maintaining the efficacy of the functions through the formulation of diverse
strategic decisions relating to cost leadership and differentiation. The purpose of the discussion is
to identify the developments in the porter’s generic model within and after 1996. Different
theoretical perspectives are being discussed as a part of the research for the better understanding
of the evolution process as per the needs of the organization.
The major aim of the porter’s generic model is to assist organizational management
teams in facilitating competitive advantage of the same over the other players in the market.
However, some critics believed that the porter’s generic model is an incomplete structure, which
might affect the organizational capabilities of undertaking efficient decisions. Therefore, Porter
also developed variety-based, needs-based and access-based strategies in order to maintain the
efficacy of the model. The evolution and development of the model is based on the assessment of
the organizational needs of assessing the external environment and thereby frame strategies for
mitigating the different issues that might be faced by the same. Parnell (2006) stated that the
Competitive strategy that was found by Porter in the year 1985 was based on the seminal low-
cost-differentiation.
However, Porter’s model was affected as the management literature shifted its scope
from typological orientation to the identification of the organization specific factors. On the other
hand, Utrilla et al. (2012) opined that the dynamic changes in the business environment has
affected the proper functioning of the model with minimization of physical boundaries through
the utilization of internet and enhanced communicability. Porter’s seminal low-cost-
differentiation of 1985 defined that organizations might achieve competitive advantage over the
existing players through activities relating to that of a low cost producer or undertaking a
differentiation strategy in the line of product offerings. The competitive advantage of the
organization will be supported through the strategic decision making of the same through
assessment of the business environment.
Parnell (2006) stated that the identification of the business environment has helped
organizations in maintaining the efficacy of the functions relating to the competitive advantage

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of the same. However, Bowman and Faulkner noted that the consumers consider the price of the
commodities rather than the cost of production in the year 1992 (Moon et al., 2014). Baroto,
Abdullah and Wan (2012) stated that the theory proposed by Bowman and Faulkner brought
about significant changes in the generic model that was proposed by Porter in the year 1985
through revision of the clause “low cost producer”.
The resource based view of the organization also brought about changes in the generic
model as the digital era required the organizations to plan its resources and allocate the same in a
manner that assists in enhancing the performance. However, Utrilla et al. (2012) stated that the
resource based model that emerged also depended on the generic model as it helped in
understanding the strategic inputs that might be combined as per the needs of the business.
Parnell (2006) stated that value proposition is one of the major standpoints that are considered
by the consumers apart from the higher cost of production. The development of the strategic fits
of the organization depends on the smooth functioning of the business operations through the
identification of the market situation and the buying behavior of the customers. The different
risks that are faced by the organizations in the recent scenario is based on lack of proper funding
that has affected the capabilities of the business in developing products as per the needs of the
customers.
Baroto, Abdullah and Wan (2012) stated that the application of Porter’s generic model
in the organizational operations will be helping in undertaking the operations through cost
reductions and thereby facilitate proper development of product lines. Tansey, Spillane and
Meng (2014) stated that adaption of Bowman’s Strategy Clock, which is an extension of the
Porter’s generic model offering flexibility of combining different strategies to meet the
discrepancies. The different aspects of change in the organizational performance are based on the
identification of the strategies that might be implemented on the model in order to enhance the
operations of the same.
Therefore, from the above discussion it might be stated that the modifications in the
Porter’s generic model has helped businesses in mitigating the issues that are faced by the same
in the contemporary markets. The developments in the model from low-cost-producer and
differentiation to the identification of the business concerns applying flexible strategies has
helped in enhancing the operations of the enterprises.

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References
Baroto, M. B., Abdullah, M. M. B., & Wan, H. L. (2012). Hybrid strategy: A new strategy for
competitive advantage. International Journal of Business and Management, 7(20), 120.
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.
Parnell, J. A. (2006). Generic strategies after two decades: a reconceptualization of competitive
strategy. Management decision, 44(8), 1139-1154.
Safón, V. (2007). How to Compete and How to Compete Profitably: A Model of Competitive
Positions and Business Performance. Global Journal Of Business Research, 1(1), 47-59.
Tansey, P., Spillane, J. P., & Meng, X. (2014). Linking response strategies adopted by
construction firms during the 2007 economic recession to Porter’s generic
strategies. Construction management and economics, 32(7-8), 705-724.
Utrilla, P. N. C., Torraleja, F. A. G., Vázquez, A. M., & Ogáyar, M. A. (2012). How does
strategic choice affect business results? A case study of mutual guarantee
societies. International Journal of Business and Management, 7(7), 51.