Michael porter developed 3 generic strategies: cost leadership‚ differentiation and focus. They are developed to create a defendable position in the long-run‚ outperforming competition and establish a competitive advantage. However does the generic strategy lead to sustainable competitive strategy? This analysis will explain in detail. Cost leadership means setting out to become the low-cost producer of its industry. Each industry is different and provides with diverse problems. Cost leadership
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the role of IVC in competition is the “value chain” by Michael E. Porter. A business is profitable if the value it creates exceeds the cost of performing the value activities. To gain competitive advantage over its rivals‚ a company must either perform these activities at a lower cost or perform them in a way that leads to differentiation to charge premium price. (Porters Generic theory of Differentiation‚ Cost Leadership‚ Focus Strategy) Porters Value Chain Analysis (VCA) helps to identify sources
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chain” by Michael E. Porter. This concept divides a company’s activities into the technologically and economically distinct activities it performs to do business. We call these as “value activities.” A business is profitable if the value it creates exceeds the cost of performing the value activities. To gain competitive advantage over its rivals‚ a company must either perform these activities at a lower cost or perform them in a way that leads to differentiation to charge premium price. (Porters Generic
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In the article "Generic Strategies"‚ the world-renowned master of competitive strategy‚ Michael Porter‚ pilots the reader through a macro-level guide to the three chief mechanisms that a company can use to achieve that elusive business world goal: Sustainable competitive advantage. Porter exalts that companies are essentially faced with a mutually exclusive decision in terms of broad level strategy. Deciding between more than one broad or generic strategy significantly increases the risk that the
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Most discussions of the competitive success of nations look at aggregate‚ economy-wide measures like the balance of trade. Porter chose a different starting point‚ beginning with individual industries and competitors and building up to the economy as a whole. Nations do not compete in the marketplace—business firms do‚ and the performance of individual companies in particular industries in where competitive advantage is either won or lost. The home nation influences the ability of its firms to succeed
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Michael Porter described Value chain as the activities which a firm carries out in order to come up with a quality product that meets the consumer’s needs. Such activities include‚ research and development‚ product design‚ production of the product‚ marketing and selling the finished product to potential customers‚ distribution management and customer service which may include after sale services like repair and maintenance (Institute of Management Accountants‚ 1996). Michael Porter further
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Professor Michael E. Porter Institute for Strategy and Competitiveness Harvard Business School Cambridge‚ Massachusetts June 24‚ 2005 This presentation draws on Michael Porter‚ Klaus Schwab: The Global Competitiveness Report 2004-2005‚ Oxford University Press‚ 2004 and other sources. For further information on the Report and on the Institute for Strategy and Competitiveness see www.isc.hbs.edu 200506 GCR Vietnam – KC 2005.06.24.ppt 1 Copyright 2005 © Professor Michael E. Porter Topics
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References: • Porter‚ Michael‚ Competitive Advantage‚ The Free Press‚ NY‚ 1985. • Porter‚ Michael‚ The Competitive Advantage of Nations‚ The Free Press‚ NY‚ 1990. • Porter‚ Michael‚ "What is strategy?" Harvard Business Review v74‚ n6 (Nov-Dec‚ 1996):61 (18
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Strategy and The Internet Michael E. Porter Harvard Business Review In this article‚ the author (Michael E. Porter)‚ explains his opinion on the use of the internet by organisations. He points out that both dot-coms and established companies have both‚ by way of competition‚ violated the core precept of strategy in businesses. Porter brings out the fact that companies focussed more on attracting more customers‚ via discounted channels‚ discounting and advertising‚ rather than having profit in
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activities they will be able win new business‚ increase customer retention‚ differentiate themselves from the competitors and generate positive publicity and media opportunities due to media interest in ethical business activities. In this article‚ Michael Porter and Mark Kramer propose a fundamentally new way to look at the relationship between business and society that does not treat corporate growth and social welfare as a zero-sum game. They introduce a framework allows business to identify the social
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