Using Porter's Generic Strategies

1873 WordsMar 20, 20168 Pages
Using Porter’s generic strategies, identify examples of organisations following strategies of differentiation, low cost or low price, and stuck-in-the middle or hybrid. How successful are these strategies? An organisation bases its strategy according to its environment, and if implemented right will be successful. Firms can target their products by a broad target, thereby covering most of the marketplace, or they can focus on a narrow target in the market (Lynch, 2003). Michael Porter created a generic strategies framework in order for an organisation to gain a competitive advantage in their industry. Porter considers three generic strategies in his framework that an organisation can undertake to gain this advantage. He believes that an organisation falls into either cost leadership (lower cost) or differentiation and once applied in a broad or narrow scope, as discussed by Lynch, creates focus (Figure 1). Furthermore, some organisations undertake in more that one of these strategies and if unsuccessful is called the stuck-in-the-middle strategy. However, if the organisation combines elements of differentiation and elements of low-cost successfully, this becomes and hybrid option and is becoming increasingly popular amongst firms in the modern day. Figure 1 - Source: Porter (1985) The first part of Porter’s framework includes the differentiation strategy across a broad target. The generic of differentiation strategy involves creating a market position that is perceived
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