It has been at the top division of the football scene since it was founded in 1899 without relegating to a lower division. Innumerable records of the team and its players speak volumes about the success of the cub. Philip Kotler author of Principles of Marketing Porter’s books on competitive strategy are the seminal works in the field. In the ______, the focus of marketing study is on the decision-making process involved in the performance of marketing function at the level of a firm. The best example I would quote here is of Café Coffee Day in India.

  • Etsy offers its users a platform to showcase their handmade wares and sell them to customers around the world.
  • Higher margins enable the firm to deal with powerful suppliers.
  • This book is a MUST for anyone involved in business strategy or management.
  • Similarly thanks like brand, quality or features could be differentiating factors.

In fact, these companies were found out to be more successful than those which followed on one of Porter’s generic strategies. Some researchers have developed an alternative conceptualization for these strategies. Market segments are smaller sub groups of your target market based on certain characteristics. Customers from the same market segment are expected to behave in a similar manner. Using this justification he developed three kinds of generic strategies that firms follow. These strategies came to be known as Porter’s generic strategies.

The Competitive Strategy

Secondly, cost leaders also has access to better human resources. They have access to better managers designers and professionals. Organisations that are caused leaders should have technical prowess to make the products The Main Causes of Business Failure at a cheaper cost. Let us consider that there are 10 different manufacturers in the market. The new car manufacturer makes cars that can run on electricity. This differentiates the manufacturer from the rest of them.

  • An extension of the cost leadership strategy, the cost focus strategy has two components for organizations to choose from.
  • Generic strategy provides an outline of how an organization should try to grow by framing objectives, selecting processes, and appealing to customers in the most effective ways.
  • Any Brand can be become a cost leader by providing high-quality products at a low price than the competitor.

It provides an enduring foundation and grounding point on which all subsequent work can be built. Competitive Strategy is skillfully narrated by Scott R. Pollak. The generic strategies are either lower cost, differentiation, or focus. Wal-Mart also controls the distribution with its own massive warehouses and logistics equipment.

Generic Competitive Strategies

Lastly, a focus strategy is aimed at a segment of the market for a product instead of the whole market. Wal-Mart Stores Inc. has been successful using cost leadership strategy very well for over years. The store has been attracting buyers with low prices; the low prices are offered every day to attract customers. The products are offered at a cheaper rate than competitors consistently, not occasionally. Wal-Mart is able to carry on the gigantic business due to its large scale and efficient supply chain management. They source products from cheap domestic suppliers and from low-wage foreign markets.

porter's competitive strategies

A low-cost advantage gives the company tremendous pricing power. It is a truism that cost is a fact and price is a strategy. Thus, with a low-cost advantage, a firm can use the marketing mix’s price element judiciously to derive maximum profits for the firm without losing out on customers. This perhaps is one reason why Starbucks cannot easily break into Coffee Day’s strongholds.

Cost Leadership Strategy

Porter initially presented focus as one of the three generic strategies, but later identified focus as a moderator of the two strategies. Companies employ this strategy by focusing on the areas in a market where there is the least amount of competition . Organizations’ can make use of the focus strategy by focusing on a specific niche in the market and offering specialized products for that niche. This is why the focus strategy is also sometimes referred to as the niche strategy . Therefore, competitive advantage can be achieved only in the company’s target segments by employing the focus strategy. The company can make use of the cost leadership or differentiation approach with regard to the focus strategy.

The ideas in the book address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing. This book is a MUST for anyone involved in business strategy or management. The audio book is expertly narrated, and for MBA students or consults or aspiring counterparts I would suggest playing this book on repeat for a few times a year while commuting. The ideas in the audiobook address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing.


There are three effective generic approaches to success to outperforming other firms in an industry. However, there are certain industries where it is very difficult to sell products just based on a single feature. The smartphone manufacturers have to cater to a wider variety of customer needs.

According to Prof. Michael Porter, the firm’s position could be categorized into one of the two broad strategies. A firm could either use cost advantage or differentiation. Meanwhile, the firm could have a broader scope or narrow scope. Coffee Day is an excellent example of its cost of making coffee, it is the lowest in the market.

Product Differentiation Strategy:

The communications used to market a product, including advertising, public relations, and other forms of direct and indirect selling. Whether customer’s bargaining power can be reduced or managed. Cost leadership provides flexibility to absorb an increase in input costs, while opponents may not have this flexibility. Considering the never-ending competition in the technology industry, there is every need for Apple Inc to redefine its strategies to maintain its stability.

Competitive Advantages of Coffee Day

When the value of the product increases with increases in the number of consumers. It is the way you use technology to solve the problems of the customer and create value. Digital products purchased from this site are sold by Simon & Schuster Digital Sales Inc. Get our latest book recommendations, author news, and competitions right to your inbox.

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