A Case Study On The Generics Business Level Strategy

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A generics business-level strategy gives a company a specific form of competitive position and advantage vis-à-vis its rivals that results in above average profitability. A company can either have a broad or narrow approach to the market. Companies that target a broad market can either concentrate on lowering their costs so they can lower prices and still make a profit, in which case they are pursuing a broad low-cost strategy. If a company try to differentiate their product in some way, they are pursuing a broad differentiation strategy. Companies that decide to recognize different segments, and offer different product to each segment are pursuing abroad differentiation strategy. Companies that target a few segments, or more…show more content…
While Southwest was at first a focus low-cost quadrant but eventually developed themselves to become a broad low-cost so they can compete with the other top airlines. This generic strategy then leads to Porters five industry force. Porter five forces analysis is a framework to analyze level of competition within an industry and business strategy development. It draws up an industrial organization to develop five forces that determine the competitive intensity and the attractiveness of a market. Attractiveness refers to the overall business profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. An unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. The five forces include; risk of entry, bargaining power of suppliers, threat of substitutes, rivalry among established companies, and bargaining power of buyers. As each of these forces grows stronger, it limits the ability of established companies to raise prices and earn greater profits. Power is affected by the ability of people to enter the market. If it costs too little in time or money to enter a market and compete effectively, if there are few economies of scale in place, or if there is little protection for key technologies, then new competitors can quickly enter the market and weaken the
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