The third step is to create the actual strategy to get to that goal. This is a strategy that hopefully can react as well as be proactive in how they respond to changes in the external and internal environment. The fourth step is actually implementing the strategy and putting the staff and managers on the front lines to achieve the goals of the strategy. This is where the operations side of the business is really put to the test and the planning of the strategy becomes essential. The last step is to determine how the process went and how the implementation of the strategy went throughout the company. This is where management and the authors of the strategy make needed changes throughout their company. Starbucks has a clearly outlined mission statement and principles however they don’t have a strong way of measuring their strategy in regards to a couple of their strategies.
Porter’s five generic strategies
The five generic strategies are strategies that are enhanced depending on the needs of the company however they are the five standard ways to try and create a competitive edge. The five strategies are being a low cost provider strategy, broad differentiation strategy, best cost strategy, market niche strategy using low cost, or a market niche strategy based on differentiation. These strategies can be found in the text book on page 134 and 135.
The first strategy is to be the lowest provider for a product that is needed and find ways to almost eliminate their costs in order to make a profit. This cost lowering is essentially because otherwise they are unable to make a profit if they sell their product as such a low price. An example of this type of business would be Wal-Mart or a 99 cent store. The second strategy is broad differentiation and it markets and targets customers that are looking for a different specialized product. They will be in the same market as some competitors however they will be looked at as having a higher quality and more expensive product. An example for this is Rolex, Mercedes or Coach.
The third strategy is best cost strategy and it is to market as the provider of quality products at a low price while in the same market as their competitor. An example might be Arco. They have the same product as Chevron or Mobile however they are a lot cheaper in their market.
The fourth and fifth strategy are similar in that businesses with this strategy will market in a niche market however for strategy number four they are marketing based on low cost theory. The difference between this strategy and the first strategy of the low cost provider is that the first strategy is utilizing a customer base that is broad and includes everyone whereas the fourth strategy is only marketing to a smaller more specialized market. An example would be a bakery supplier to a store chain that supplies that chain with a private label. They don’t have a lot of marketing costs and are a single niche product. The last strategy is the niche market as well however they make their products different and more specialized than...