The choice is up to you, of course. To succeed at this strategy, your business should have access to leading scientific research or perform this research ; a highly skilled and creative product development team; a strong sales and marketing team; and a corporate reputation for quality and innovation.
On the other hand, this is definitely an Samsung three generic strategies strategy for small companies especially for those wanting to avoid competition with big one. The Customer Focus Strategy Niche marketing: This involves providing the best value for a relatively low price.
Porter suggested combining multiple strategies is successful in only one case. One of the most important reasons why this is wise advice is that the things you need to do to make each type of strategy work appeal to different types of people.
A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly.
Access to the capital needed to invest in technology that will bring costs down. You increase value by lowering prices or increasing benefits and services to justify the higher price. The least profitable firms were those with moderate market share. Apple must continually develop innovative products so that the firm always stands out against competitors.
In most cases firms end up in price wars. These generic strategies are not necessarily compatible with one another. A focus strategy works well for small but aggressive businesses. It is attempting to differentiate itself along these dimensions favorably relative to its competition.
Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether.
Ikea is able to keep its prices low because it sources its products from low-wage countries.
Differentiation drives profitability when the added price of the product outweighs the added expense to acquire the product or service but is ineffective when its uniqueness is easily replicated by its competitors. The cost leadership strategy usually targets a broad market. In the event of a price war, the firm can maintain some profitability while the competition suffers losses.
Apple uses market penetration as its second most significant intensive strategy for growth. The idea is to make your company stand out within a specific market sector.
According to Baden-Fuller and Stopford the most successful companies are the ones that can resolve what they call "the dilemma of opposites". Having done this, it may be clear that your organization is unlikely to be able to make a success of some of the generic strategies.
Wal-Mart is famous for squeezing its suppliers to ensure low prices for its goods. In particular, the firm achieves more sales by adding more authorized sellers in its current markets. The terms "Cost Focus" and "Differentiation Focus" can be a little confusing, as they could be interpreted as meaning "a focus on cost" or "a focus on differentiation.
Thought from convenience point of view this is less suitable, customers still buy it from Ikea because of the lowest price tags. This makes their particular market segment less attractive to competitors.
Specifically, companies that do not have the ability or resources to engage in a nationwide marketing effort will benefit from a focus strategy.
Apple uses market development as the least significant of its intensive strategies for growth. Wal-Mart is an example of a company with a cost leadership strategy. Otherwise, with more than one single generic strategy the firm will be "stuck in the middle" and will not achieve a competitive advantage.
Even without a price war, as the industry matures and prices decline, the firms that can produce more cheaply will remain profitable for a longer period of time.Porter's generic strategy model Based on Porter's view it is necessary to adopt a cost leadership strategy and only the successful strategy for the Wal-Mart retail was the cost leadership due to its advantage edge over other strategies from the porter's model (Mintzberg, et al., ).
Porter's Generic Competitive Strategies (ways of competing) lead to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation, and focus.
The focus strategy has two variants, cost focus and differentiation focus. 1. Cost Leadership. Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. There are three/four generic strategies, either lower cost, differentiated, or focus.A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a.
Generic strategy samsung 1. Samsung: Generic Strategy Group – 4 Section – S3 Abhishek Sharma FT Guneet Arneja FT Niyati Mehta FT.
In this paper I have evaluated Michael Porter‟s generic competitive strategies and their pit-falls, exemplified these strategies by case studies. I have provided some recommendations also. These three generic strategies are defined along two dimensions: strategic scope and strategic strength.
Strategic scope is a demand-side dimension. Apple’s generic strategy (Porter’s model) and intensive growth strategies ensure the company's success. Emphasis on these two intensive growth strategies can improve Apple’s resilience against aggressive competitors like Samsung.
References. Home Depot’s Generic Strategy, Intensive Growth Strategies.Download