Porter's 3 Generic Strategies
What are Porter’s Generic Strategies?
Porter discusses five generic strategies: Differentiation, Cost Leadership, Focus (Cost), and Focus (Differentiation). These strategies are designed to help businesses achieve competitive advantage. Differentiation involves creating products or services that are perceived by customers as being unique or superior to those of competitors. Cost Leadership involves producing a product or service at the lowest cost relative to other industry rivals. Focus (Cost) strategy is used when a company targets a specific segment of the market with products that have low prices relative to competitors’ offerings. The Focus (Differentiation) strategy is used when companies target a specific segment of the market with products that are perceived as being unique or superior compared to their competition’s offerings. Each strategy has its own advantages and disadvantages, so businesses should experiment with different approaches before deciding on one particular approach.