BMT 12 Porter's Generic Strategies HL

Question 1

porter’s generic strategies

Answer 1

ways in which a business can gain a competitive advantage over other businesses

Question 2

what does porter’s generic strategies diagram look like

Answer 2

Question 3

Mass market

Cost leadership

Answer 3

• attempting to be the business with the lowest cost in the whole market

Question 4

Mass market

Differentiation

Answer 4

• attempting to sell products which are unlike those of the competition in order to charge a higher price - USP
• could be based on luxurious, environmentally friendy or technology

Question 5

niche market

cost focus

Answer 5

• attempting to be the business with the lowest cost in a specific market

Question 6

niche market

differentiation focus

Answer 6

• attempting to sell products which are unlike those of the competition in a specific market

Question 7

pros and cons of the generic strategies

Answer 7

P:
a good starting point, businesses must follow one of the 3 strategies otherwise they’ll be stuck in the middle
C:
the right strategy may change depending on outside factors
does not tell a business how to become a cost leader or make it happen
some would argue that cost leadership and differentiation could be possible at the same time e.g. amazon (with prime)