porters generic strategies

• Who developed the concept of generic strategies?

  Michael Porter
• What is the main challenge for business leaders regarding strategy?

  Gaining competitive advantage over competitors
• What are the two broad approaches to successful strategy identified by Porter?

  Differentiation and low cost
• What does competitive advantage refer to?

  Sustainable advantage over competition
• How can a business achieve competitive advantage?

  By organizing operations to offer unmatched value
• What is the essence of Porter's generic strategies?

  Identifying sources of competitive advantage
• What is the objective of a low-cost strategy?

  To become the lowest cost operator
• What are economies of scale?

  Lower unit costs as output increases
• Why is low cost a powerful source of advantage?

  It allows better profits per unit sold
• What types of products are suitable for a low-cost strategy?

  Products requiring little differentiation
• What is a key feature of successful low-cost businesses?

  Achieving high economies of scale
• How can a business achieve low-cost advantage besides economies of scale?

  By investing in automation and efficiency
• What is a low-cost culture?

  A culture focused on eliminating costs and waste
• What is the essence of differentiation strategy?

  Creating distinct products valued by customers
• How can a product be differentiated?

  Through superior quality and distinctive branding
• What is the risk of being stuck in the middle?

  Facing competitors with lower costs or better differentiation
• Which company has struggled due to being stuck in the middle?

  McDonald's
• What are hybrid strategies in business?

  Combining low cost with differentiation
• What are the key features of Porter's generic strategies?

  • Two main strategies: differentiation and low cost
  • Competitive advantage is sustainable
  • Low-cost strategy focuses on being the lowest cost operator
  • Differentiation strategy focuses on unique product value
  • Risk of being stuck in the middle
• What are the strengths and weaknesses of low-cost and differentiation strategies?

  Strengths:

  • Low-cost: Higher profits per unit, market share growth
  • Differentiation: Customer loyalty, premium pricing

  
  

  Weaknesses:

  • Low-cost: Vulnerable to price wars
  • Differentiation: Higher costs, risk of imitation