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- Herausgeber: GRIN Verlag
- Sprache: Englisch
Essay from the year 2013 in the subject Communications - Public Relations, Advertising, Marketing, Social Media, grade: 1.0, University of Westminster, language: English, abstract: ´Porter is considered by many as the most influential strategist in the field of business-strategy. His three generic strategies introduced in 1980 has become a dominant paradigm in business policy literature and has had a deep and pervasive influence on the way of thinking in strategy formulation. The development of a competitive strategy is the search for a favourable competitive position in an industry, aiming to establish a profitable and sustainable competitive advantage over its rivals by choosing activities that are superior in a way that is of value to customers (Porter, 1985; Porter, 1996). In order to formulate an overall strategy and to understand a firm’s environment as well as to achieve a competitive advantage to outperform rivals in the industry, a company has to apply two frameworks: Porter’s five forces of suppliers, buyers, potential entrants, substitutes and rivalry is a means to define the sustainability and long-term profitability of one industry versus others and thus help to understand the industry attractiveness. The three generic strategies namely cost leadership, differentiation and focus strategy as the second framework provide the context for the actions to be taken into account to achieve a superior performance. Hence, they should be an essential component in any firm’s strategic plan (Porter, 1980; Porter, 1985; Porter, 1996).
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Veröffentlichungsjahr: 2014
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Inhaltsverzeichnis
Summary
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Summary
Porter is considered by many as the most influential strategist in the field of business-strategy. His three generic strategies introduced in 1980 has become a dominant paradigm in business policy literature andhas had a deep and pervasive influence onthe way of thinking in strategy formulation.
The development of a competitive strategy is the search for a favourable competitive position in an industry, aiming to establish a profitable and sustainablecompetitive advantage over its rivals by choosing activities that are superior in a way that is of value to customers(Porter, 1985; Porter, 1996).
In order to formulate an overall strategy and to understand a firm’s environment as well as to achieve a competitive advantage to outperform rivals in the industry, a company has to apply two frameworks: Porter’s five forcesof suppliers, buyers, potential entrants, substitutes and rivalry is a means to define the sustainability and long-term profitability of one industry versus others and thus help to understand the industry attractiveness.The three generic strategies namely cost leadership, differentiation and focus strategyas the second frameworkprovide the context for the actions to be taken into account to achieve a superior performance. Hence, they should be an essential component in any firm’s strategic plan (Porter, 1980; Porter, 1985; Porter, 1996).
Porter was the first to discuss the importance of choosing and focusing on one of the alternatives of thegeneric strategies. His view that thegeneric strategies of cost leadership and differentiation are mutually exclusive was highly debated among scholars.While adherers of the ‘Porter’s school of thought’ agree with Porter about that there is a trade-off between cost leadership and differentiation strategies, the ‘opposing school’ argue that the generic strategies a reconcilable and synergetic.
To sum up it can be said that cost leadership and differentiation strategies are not necessarily conflicting strategies.
Porter has defined three generic strategies for achieving competitive advantages to outperform rivals in the industry: cost leadership, differentiation and focus strategy (Porter, 1980; Porter, 1985). Since the inception the generic strategies have been examined from many scholars (Hambrick, 1983; Dess & Davis, 1984; Wright, 1987; Hill, 1988; Kim & Lim, 1988; Nayyar, 1993; Helms, 1997; Eonsoo, 2004; Akan et al., 2006).
