Porter's Generic Strategy: SWOT Analysis

Each organization has or should have a distinct business strategy to ensure they reach their desired goals and objectives. Uniquely, the business strategy, or competitive strategy, should include their target consumers, the product or service desired by their consumers, and their roadmap to remain competitive in the market (Parnell, 2014). However, strategies may be difficult to determine when the organization is engrossed in one industry, but decides to dip their toe in another industry (Bethel, 2016).

Porters Generic Competitive Strategies: The relative position of a company within its industry concludes whether the profitability of the firm is above or below the industry’s average. The above average profitability of the firm is fundamentally showing the sustainable competitive advantage in its long run. According to Michael Porter, competitive advantages originate from the value of a firm and there are two types of competitive advantages, which a company can own. These are low cost or differentiation. For any company, in

This report consults literature from a range of academic resources in order to provide an understanding of strategy, strategic management and how firms achieve and sustain a competitive advantage. The paper will focus on Generic strategies implemented by firms in industry, low cost and differentiation.

According to Porter (1985) a company can apply three generic types of strategies to protect itself while competitive force is a key issue of the management. To achieve this position a strategy based on competency must be accomplished

In this part, this report focuses on Porter’s Generic Strategies to analysis the strategic positioning of the major play in toys and games industry. According to Dess, Lumpkin and Eisner 2010, Porter’s Generic Strategies include three strategies which are Differentiation, Focus and Cost leadership which a company can use for achieve competitive advantage and overcome five force.

Porter's focus strategy is a mix of both the differentiation and the cost leadership strategies i.e. difference or cost leadership within a small target market segment. For instance: a company should be able to differentiate its products based on a particular target market segment because if the differences in products does not appeal to consumers in that target market as opposed to consumers in broad market, there would be no basis for differentiation and competitive advantage will not have been achieved.

To attain competitive gain, organisations can differentiate their merchandise and services from their competitors they can also choose to lower their costs in order to compete with other contenders. By aiming their produces to a wide-ranging target, they are essentially covering most of the marketplace or if they choose, they can decide to concentrate on a narrower target within the market (Lynch 2003). While doing so may reduce their market range it essentially reduces their other competitors. Porter stated that there are three generic strategies that an organisation can follow to achieve competitive gain over other organisations. These are:

The Porter’s analysis is a powerful tool in the strategy management. It helps to make decisions based on the external environment and the internal factors and to design the long-term goals of the company. Porter’s analysis mainly deals with the external environment of the firm which means the macro environment external to the company. The five forces of PORTER’S analysis includes

Michael Porter explains that before "Competitive Strategy" most of the strategic thinking was focused on ordering and organizing of internal resources of the company and adapting it to face specific conditions in the market, or increasing the competitiveness of the company by lowering prices in order to increase its market share. Through his book "Competitive Strategy", Michael Porter seeks to bring compatibility between these approaches, offering a new way the administration to look at the strategy from the point of view of the industry itself rather than looking at it from the point of view of the market or the organizational capacities.

Strategy can be defined as being different from one’s competitors, finding the race to operate and accomplished it. According to Michael Porter (1996), while becoming better at what you do is desirable, it will not benefit you in the long run because it is something other competitors can also do. Strategies for organizations are originally developed by Michael E. Porter in 1979 by introducing the five forces model. A company can identify the industry profitability and attractiveness by analyzing the five forces of Porter (Johnson et al., 2008). And then a reasonable strategy can be set up in line with the strengths and the weakness of an organization is able to create a plan for a stronger position for the organization within its

In the business world, strategy is probably the most often used and the most often confused term. The article ‘Why Business Models Matter’ clarifies and elaborates on crucial element of any organization. The Author, who also wrote, ‘What Management is’ asserts that the business model and strategy is the basis of any organization whether it be profit or non-profit. Magretta shows the outlines of business model and strategy. To make a big success in business, the first step is making a business model, when making a new business model, managers must think about all possible outcomes. She goes on further in the article to give examples successful organizations and their use of strategies to compete within the industry.

The manner in which firms are able to compete is most commonly categorized by implementing Michael Porter’s strategic typologies. Porter’s strategic theory has been the most widely accepted strategic approach used by fellow academics (Kim and Lim 1988; Bordean et al 2010). Porter proposed three generic strategies namely: cost leadership, differentiation and focus strategy. Warszawski (1996) later introduced a competitive strategy

According to Porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation and focus. Porter calls these bases as generic strategies.

Porter’s generic strategies describe how a company attains competitive advantage across its chosen market scope. There are three generic strategies-cost leadership, differentiation and

The generic strategy allows the firm to react to the five forces better than their competitors (Worthington & Britton, 2006). According to Porter (1985), an organization can enjoy competitive advantage by focusing on the generic competitive strategies. The organization could enjoy competitive edge by either offering the product at low cost or differentiating the product from the competitors or by focusing on a specific market. Porter (1985) emphasized that the generic strategies should be at the centre of the strategic plans.