Critically discuss the purpose and application of the following two models, and highlight any differences between them: (a)
Porter’s Generic Strategies
The Strategy Clock
Purpose of Porter’s Generic Strategies and Bowman's Strategic Clock are both aimed to help companies understand how they compete in the marketplace. Base on the different combinations of price and perceived value, companies should know how to choose a position of competitive advantage that understanding the company's competencies.
Application of Generic Strategies is focus on three ways in which a company could provide its customers with what they wanted at a better price, or more effectively than others. Three generic strategies are: cost leadership, differentiation, and focus.
Application of Strategic Clock is to extend Porter's three strategic positions to eight, and explains the cost and perceived value combinations many companies use, and also identifying the possibility of success for each strategy.
Differences between these models are:
Generic strategies focus strategy concentrates on a narrow market by cost advantage or differentiation but Strategy Clock is not. 2)
Generic strategies are talking about using strategy of cost leadership or differentiation, but Strategy Clock is using the combination of both and it concern more the relationship within value of product and price.
With reference to the Strategy Clock, what strategy is IKEA pursuing and what evidence is there in the case to support your conclusion?
IKEA is using the Hybrids strategy; they offer products at a lower cost, but offer products with a higher perceived value than those of other low cost competitors. IKEA is providing high volume is an issue here, 7000 number of items from kitchen cabinets to candlesticks, but it built a reputation of offering fair prices for reasonable goods. And also IKEA aimed to lower the prices across its entire offering by an...
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