Porters generic strategies

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Generic strategies model

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Cost leadership

  • A business sets out to be the lowest cost producer in the market 
  • It produces standard products on a large scale (economies of scale)
  • Quality may be lower which may affect reputation 

May be achieved by new prodcution techniques, new suppliers & improved productivity

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Differentiation

  • Making the product differnt from the competiton to charge higher prices and increase sales
  • Differntiation can be achieved through value leadeship e.g. USP
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Focused Niche and Mass

  • These are comparable approaches but in niche markets targeting concentrated segments 
  • Usually used by small or medium sized businesses 
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