porters strategic matrix

• what is it- 4 generic business strategies that could be adopted in order to gain competitive advantage
• sources of competitive advantage:

  • cost leadership - making products at lowest cost
  • differentiation - P/s is unique + USP adds value to product
  • cost focus - P/S serve small specific niche, high costs passed to customers no close substitutes
• cost leadership strategy - highly competitive markets. customers switch to gain best value. New entrants to market use low process to build customer base
• differentiation - highly technological markets. where rapidly changing + evolving features of P/S. customers needs very diverse. customers market follows similar differentiation strategy
• cost focus - useful when bus. wants to offer very low costs to small market segment. Niche marketing at low cost
• Differentiation focus - useful bus. offer P/S to small market segment. Differentiated + aimed at niche market
• business stuck in the middle - Morrisons, Woolworths/wicks
• uses of Porters strategic matrix - clear direction + understanding of bus. strategy adapting. support consistency in business = more effecting marketing or production. Easy identify potential areas of trouble + how business can improve position
• limitations of porters strategic matrix - not relative in dynamic + changing markets. Not useful in crisis situation ass over simplifies market structure + analysis can be subjective. Possible business offer range of products and not get stuck in the middle.