Each of the three options needs to be considered within the context of two aspects of the competitive environment. Even though an industry may have below-average profitability, a firm that is optimally positioned can generate superior returns. Porter's Generic Strategies Designed by Michael Porter in 1979, Porter’s Generic Strategies is a frameworks used to outline the three major strategic options open to organizations that wish to achieve a sustainable competitive advantage. Michael Porter's Generic Strategies are a useful framework for organisations to identify a potential niche in which they can gain a competitive advantage in any industry. The most common models of strategic planning use the popular Porter’s strategic models of cost leadership, differentiation and […] Costs are … He has further divided the last one into two categories – cost focus and differentiation focus. Several commentators have questioned the use of generic strategies claiming they lack specificity, lack flexibility, and are limiting. Porter’s Generic Strategies – Focus Strategy Focus Strategy is the strategy which believes in concentrating on a small segment defined in terms of customer segment or geographical territory. The writer had done related analysis for the research. Until 1980 it was observed that the impact of marketing was not uniform for different companies. These strategies are cost leadership, differentiation and focus. Description: The cost leadership strategy advocates gaining competitive advantage due to the lowest cost of production of a product or service. In this business analysis case of Walmart, competitive advantage is maintained through a variety of strategies and tactics. Porter proposed a general-purpose value chain that companies can use to examine all of their activities, and see how they're connected. The writer had chosen Porters Generic Strategies as the research topic. Application of Porter’s generic strategies in various industries. Organisations or companies that apply Porter’s Generic Strategies to seek competitive strategies to achieve and sustain competitive advantage as the competition among organisations or companies is getting more and more intense. As a low-cost provider, McDonald’s offers products that are relatively cheaper compared to competitors like Arby’s. Porter stressed the idea that only one strategy should be adopted by a firm and failure to do so will result in “stuck in the middle” scenario. ADW Capital had an incredible … Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry. Apart from that, Porter’s generic competitive strategies can be used by the organization that could use to develop and maintain competitive advantage in the market, such as cost leadership strategy and focus strategy. Cost leadership, Differentiation, Focus Strategy “ Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different “ – Michael Porter . Michael E. Porter’s model illustrates that a company uses a generic competitive strategy as a general and basic approach to effectively compete against other firms in the industry. These three are: cost leadership, differentiation and focus. Lowest cost need not mean lowest price. Netflix Inc.’s business model aligns with the company’s generic strategy for competitive advantage (Porter’s model), and intensive growth strategies (Ansoff Matrix). Porter’s Generic Strategies inspired countless case studies, recounting the successful types of competitive strategy implemented by businesses such as Walmart, Southwest Airlines and Ikea. the potential to be, it's competitive advantage. After much research, he eventually determined there are only 4 (generic) strategies that a company can take, which he described with a simple 2×2 grid. In his book, Porter explained that a company must create clear goals, strategies, and operations to build sustainable competitive advantage. Therefore, Porter suggested that the company can use either the differentiation or cost leadership or focus strategy as a competitive edge to survive in the market. Apart from it, there are four intensive strategies that brands can use to grow their customer base and sales. It is also about how and where management decides to engage in those activities.