Porters generic strategies * Flashcards
What are Porters three generic strategies?
Three generic corporate strategies suggested by Porter to give businesses a CA.
What is cost leadership?
To try and get the lowest production costs possible by maximising efficiency and benefitting from EOS.
This will allow businesses to use competitive pricing to win price wars as their costs are low thus prices can be too, whilst profiting.
What is differentiation?
When a business produces a product with unique, in demand features, so consumers believe it’s better than rivals products, allowing a business to charge premium prices.
Businesses who are innovative with strong brands can do this as they can experiment and their brand alone will see sales as people trust brands.
However, imitation from rivals and changes in tastes make this a bit risky.
What does focus mean in relation to Porters generic stratergies?
Focus strategy concentrates on niche markets and either minimising costs or differentiating.
