ISTANBUL AYDIN UNIVERSITY

INSTITUTE OF SOCIAL SCIENCES

CONTEMPORARY MANAGEMENT AND PLANNING

NAME: IGBAGBOLERE REUBEN OJO

STUDENT NUMBER: Y1912.130003

DEPARTMENT OF BUSINESS ADMINISTRATION

MID – TERM HOMEWORK

JANUARY 2021

ASSIGNMENT: You have 2 million dollars capital. You are considering setting up a service
company providing services for SAP applications in Turkey. Initially, which of Porter's
generic business strategies (differentiation or cost leadership) would you prefer to
implement? Why is that? Make an assessment that does not exceed two pages.

Systems application and data processing company (SAP) is a top tier level of
organization or company which in turn is extremely capital intensive as it is the market leader in
ERP software, enhancing different other companies hence the explanation for a sum of 2 million
dollars capital. Every start-up company needs a vision and mission which is guided by strategy,
strategic planning, implementation and evaluation. On the other hand, starting SAP in Turkey
means breaking into an already existing business pool of other software developers, operating
system developers like Radity Gmbh, A6 Digital etc, only shows that for my SAP application
company to survive even with 2million dollars, I need a strategy to beat the competition.
The introduction of Porter’s generic force into any business structure is solely for one
purpose and that is gaining competitive advantage over your competitors, so therefore either
there is a decision to be made if I will be adopting the broad way which is Cost leadership and
Differentiation Leadership or the narrow methods of cost focus or differentiation focus. So, in
Turkey, I see the dominant market structure as one where I need to obtain a critical advantage
because other software’s are top tier too. Therefore, in light of this, Porters generic will be used
to determine the course of strategy and growth model using the Differentiation method to handle
the competitive pressure.

DIFFERENTIATION LEADERSHIP AND FOCUS

Differentiation is one of the major Porter’s generic forces to build a competitive advantage in an
existing business pool and considering my starting capital share of 2 million dollars. The sole
purpose of using differentiation method instead of the cost leadership is to achieve automatic
growth objectives. One of the key strategies here is to create an application that matches the
unique taste and needs of customers using new innovations from new soft tech developers to
provide a synergised the customer and make my new company their preference reaching for my
brand over the likes of Radity and A6 Digital.
So therefore, highlighted below are some of the reasons I will be using the
differentiation method:
 Using differentiation as a primary generic strategy will allow my company to attract a
customer base of younger generation by emphasizing unique special and new features. In
2019, Samsung gained a whooping 3% increase in customer base by only introducing the
wireless charger’s package, that also is possible with my new company.
 More so, using differentiation as a new and young entrant provides me with the
advantage of providing solution to growing and stated concerns already by studying the
consumers changing interests to separate itself from from the competition and widen the
hope for new opportunities in the software industry.
 Via the differentiation strategy, I am definitely using my capital start up to provide
alternatives irrespective of the capital needed on a particular area. A large investment in
advertising, marketing, YouTube ads, will go a along way providing some edge
scenarios.
 Also, hiring extensive experience software developers, creating a strong presence with
some big names will be highlighted in the company’s marketing and competitive
strategies.
Moreover, my company will be offering a wide range of flavours to match the
undying desires of customers, using innovation as a critical too to couple together the
desires of customers, draw their preference towards my new company over the other
existing brands.