Porters model of generic strategies

• What are the four generic business strategies suggested by Porter?

  Cost leadership, differentiation leadership, cost focus, differentiation focus
• What is the key strategic challenge for businesses according to Porter?

  Achieving sustainable competitive advantage
• How is competitive advantage defined?

  Offering greater value to consumers
• What is an example of a company that uses a low-cost strategy?

  McDonald's
• What is the objective of the cost leadership strategy?

  To become the lowest-cost producer in the industry
• Why is cost leadership potentially important in market segments?

  It allows for better profits if prices are competitive
• What traditional method helps achieve cost leadership?

  Producing on a large scale
• What is a characteristic of businesses using cost leadership?

  Offering standard products with little differentiation
• What does a cost focus strategy entail?

  Seeking a lower-cost advantage in a small market
• What is a common term for products in a cost focus strategy?

  "Me-too's"
• What is the goal of the differentiation focus strategy?

  To differentiate within a small market segment
• What must businesses ensure when adopting a differentiation focus strategy?

  That customer needs are genuinely different
• What is an example of a company using differentiation focus?

  Tyrrells Crisps
• What does differentiation leadership aim to achieve?

  Competitive advantage through industry-wide differentiation
• How do businesses typically charge for differentiated products?

  At a premium price reflecting added value
• What are some methods to achieve differentiation leadership?

  Superior quality, branding, and distribution
• Name a global brand that exemplifies differentiation leadership.

  Nike
• What is a key aspect of differentiation in marketing?

  Providing clear reasons for customer preference
• What is required for successful differentiation leadership?

  Substantial and sustained marketing investment