Porter's generic strategies are a set of three broad approaches, described by Michael Porter, that a company can pursue to achieve competitive advantage within an industry: cost leadership, differentiation, and focus, with focus itself divided into a cost-focus and a differentiation-focus variant. Porter argued that a firm which fails to commit clearly to one of these strategies risks becoming stuck in the middle, unable to compete on either the basis of low cost or of meaningful differentiation. The framework has been widely taught in business strategy as a way of clarifying the basic choices available to a firm competing in a given market.
Facts
Core ClaimA company pursues competitive advantage in its chosen market scope through one of three generic strategies: cost leadership, product differentiation, or focus. 1 Cross-Tradition Connections
Associated With
Blue Ocean Strategy is positioned by its authors as an alternative to Porter's competition-based generic strategies.
Both frameworks were developed by Michael Porter as complementary tools for competitive strategy analysis.
Value Chain Analysis is used to identify the activities through which a firm pursues one of Porter's generic strategies.
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