Porter's 3 Generic Strategies to Gain Advantage
- Created by: tanja soulsby
- Created on: 01-06-17 09:55
View mindmap
- Porter's 3 Generic Strategies to Gain Advantage
- Cost Leadership
- Calls for lowest cost of production for given level of quality
- Big firms with large, efficient production facilities, benefiting from economies of scale can use this strategy
- In a price war, firm can stay profitable while competition suffers losses
- If prices decline the firm can stay profitable because of low costs
- Differentiation
- Requires a product with unique attributes which consumers value
- They perceive it to be better than rival products
- Allow businesses to charge premium prices
- Businesses benefiting have:
- Innovation
- Strong branding
- Quality products
- Risks
- Imitation by competitors
- Changes in consumer tastes
- Requires a product with unique attributes which consumers value
- Focus
- Concentrates on niche market segments to either achieve
- Cost adantage
- Differentiation
- Suits firms with fewer resources who can target markets with specific needs
- A firm using this strategy usually has loyal customers, making it hard for other firms to compete
- Concentrates on niche market segments to either achieve
- Cost Leadership
Similar Business Studies resources:
Teacher recommended
Comments
No comments have yet been made