TOPIC - Choosing Generic Business Strategies

using Porter's Model of Competitive advantage

Submitted by - Vihang Jain

Anurag Keshri
Choosing Generic Business
Strategies using Porter's
Model of Competitive
Advantage
Learn about the four generic business strategies and how to
choose the best one for your company using Porter's Model
of Competitive Advantage.
Porter's Model of Competitive Advantage

Michael Porter Five Forces Four Strategies

Introduced the world to the five Suppliers, buyers, new entrants, Companies can choose from Cost
forces that shape industry substitutes, and industry rivalry Leadership, Differentiation, Cost
competition and the four generic shape industry competition. Focus, and Differentiation Focus
business strategies. to gain a competitive edge.
Cost Leadership and Cost Focus
1 Cost Leadership 2 Cost Focus

Companies aim to achieve the lowest cost of Companies chose a narrow market segment
production and reduce prices to attract and aim to be the lowest-cost producer within
customers. Effective in price-sensitive markets. that market. Effective in small, niche markets.
Differentiation and Differentiation Focus

Differentiation Differentiation Focus

Companies aim to differentiate their products or Companies choose a narrow market segment and aim
services by delivering unique features or benefits. to deliver unique features that cater to the specific
Effective in markets that value product needs of that segment. Effective in small, niche
differentiation. markets.
Analyzing the Industry and Competition
Step 2: Identify Industry Trends

Consider the growth rate, customer demand,

technological advancements, and global market
exposure.

1 2 3

Step 1: Analyze the Five Forces Step 3: Competitor Analysis

Identify the intensity of competition, buyer and Profile key competitors, their strengths and
supplier power, threat of new entrants, and weaknesses, market positioning, financial
substitutes. performance, and strategies.
Choosing a Business Strategy
Resources and Capabilities Market Segment

Assess the company's strengths and weaknesses, Identify the target market segment's size, growth
resources, core competencies, and capabilities that rate, profitability, and buyer preferences.
can support a chosen strategy.

Industry Structure Buyer Preferences

Consider the level of competition, pricing power, Understand the customer's primary needs,
supplier and buyer bargaining power, and entry priorities, preferences, and willingness to pay for
barriers. value.
Implementation and Evaluation
Step 2: Implementation Plan
Develop an action plan, allocate resources,
and execute the plan with milestones to
monitor progress.
1 Step 1: Communicate the Strategy
Ensure the organization understands the
2 chosen strategy and is aligned with the
vision and mission.
3 Step 3: Evaluate Performance
Monitor performance metrics, gather
feedback, adjust the plan, and develop
contingency plans.
Conclusion and Recommendations
Conclusion
Choosing the right business strategy can help the
organization gain a competitive advantage and
succeed in the market. Porter's Model provides an
effective framework to analyze and choose a strategy.
Recommendations
Companies should regularly assess industry and
market changes, monitor competitors, and adjust their
strategies to remain competitive.