Porter's strategy matrix

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  • Porters Strategy Matrix
    • what is it?
      • it is a way of finding sustainable competitive advantage over competitors
        • competitive advantage is having something better than competitors
    • Porter suggested 2 strategies
      • low cost strategy
        • the aim is to become the lowest cost operator
          • high levels of productivity and efficiency
          • bargains prices with supplier
        • would involve production on large scale, benefiting from economies of scale
        • why would this be an advantage?
          • if it costs them less to produce they can reduce prices
            • they would be most likely to get more profits
        • Aldi/poundland
      • focus and differentiation
        • offers a product that is distinctively different
        • ways in which businesses achieve differentiation
          • superior quality
          • branding- brand loyalty
          • wide distribution- becomes and essential item
          • sustained promotion- dominates by advertising
        • Costa/premier inn
    • 'stuck in the middle'
      • low cost and differentiation
      • McDonalds/ morrisons

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