BMT 12 - Porter's Generic Strategies (HL - Unit 3)

Question 1

Porter’s Generic Strategy

Answer 1

Ways in which a business can gain a competitive advantage over its competitors

Question 2

Total (Mass Market)

Answer 2

Targeting all segments of the market

Question 3

Cost Leadership

Answer 3

Attempting to be the business with the lowest cost in the whole market

• Link to EOS
• Lowest cost might not mean lowest

Question 4

Differentiation

Answer 4

Attempting to sell products that are unlike those of the competition to charge a higher price

• USP

Question 5

Niche Market

Answer 5

Targeting one (or a few) segment of the market

Question 6

Cost Focus

Answer 6

Attempting to be the business with the lowest cost in a specific market

Question 7

Differentiation Focus

Answer 7

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

Question 8

‘Stuck in the Middle’

Answer 8

• Businesses must follow one of the 3 strategies, otherwise, they will be “Stuck in the Middle”
• Not known for anything

Question 9

Pros of Porter’s Generic Stategies

Answer 9

• A good starting point for businesses
• The right strategy may change depending on outside factors

Question 10

Cons of Porter’s Generic Stategies

Answer 10

• Does not tell a business how to become a cost leader, or make it happen
• Can achieve both cost leadership and differentiation at the same time.