Porter's Four Generic Strategies

1880 Words Jul 6th, 2015 8 Pages
According to Mullins (2010) “Organisations have no goals; only people do. Organisational goals are established by people, either individually or more usually by a number of individuals co-operating.”
The management of an organisation strives to meet these goals by developing a strategy to reach them. This essay shall look at porter’s four generic strategies and show examples of tools that can be used to assist the innovation management to support these goals. These tools include those which insure that the workforce’s goals are aligned to the goals of the organisation.
This essay shall outline porter’s four generic strategies: ‘cost leadership’, ‘differentiation’, ‘cost focus’ and ‘differentiation focus’. These relate to segments 3A, 3B, A company has to be in one of these four segments: it cannot be between two. (Longmuir, 2015a) To achieve this, policies and procedures need to be developed to focus the whole company from top to bottom
This essay shall then go on to show how innovation is used to maximise profits in organisations in all four quadrants. Throughout this essay it shall be assumed that profit is the bottom line of all businesses, but the author would like to state that this might sometimes not be true which shall be alluded to in the section on overall differentiation.
A business in the cost leadership segment (top left of figure 1) concentrates being as cheap for the customer as possible: budget airlines and Poundland could be seen as falling into this…
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