Porter's Generic Strategies
If the primary determinant of a firm’s profitability is the attractiveness of the industry in which it operates, an important condary determinant is its position within that industry。 Even though an industry may have below-average profitability， a firm that is optimally positioned can generate superior returns。
A firm positions itlf by leveraging its strengths. Michael Porter has argued that a firm’s strengths ultimately fall into one of two headings: cost advantage and differentiation。 By applying the strengths in either a broad or narrow scope, three generic strategies result： cost leadership， differentiation, and focus. The strategies are applied at the business unit level. They are called generic strategies becau they are not firm or industry dependent. The following table illustrates Porter’s generic strategies：
Porter’s Generic Strategies
管理手段
Target Scope重庆区号是多少 | Advantage |
Low Cost | Product Uniqueness |
Broad
（Industry Wide)
| Cost Leadership
Strategy | Differentiation
Strategy |
Narrow
（Market Segment）
| Focus
Strategy
(low cost) | Focus
Strategy
(differentiation） |
| | |
折射规律
盆栽栀子花
荷叶母亲
Cost Leadership Strategy 奥数题
This generic strategy calls for being the low cost producer in an industry for a given level of quality。 The firm lls its products either at average industry prices to earn a profit higher than that of rivals， or below the average industry prices to gain market share。 In the event of a price war, the firm can maintain some profitability while the competition suffers loss. 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. The cost leadership strategy usually targets a broad market.免费老歌
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 altogethe
r。 If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage bad on cost leadership.
Firms that succeed in cost leadership often have the following internal strengths:
∙Access to the capital required to make a significant investment in production asts； this investment reprents a barrier to entry that many firms may not overcome。
∙Skill in designing products for efficient manufacturing, for example， having a small component count to shorten the asmbly process.
历史书七年级上册
∙High level of experti in manufacturing process engineering。
∙Efficient distribution channels.
Each generic strategy has its risks, including the low-cost strategy. For example, other firms may be able to lower their costs as well。 As technology improves， the competition may be able to leapfrog the production capabilities, thus eliminating the comp
etitive advantage。 Additionally， veral firms following a focus strategy and targeting various narrow markets may be able to achieve an even lower cost within their gments and as a group gain significant market share。
Differentiation Strategy
A differentiation strategy calls for the development of a product or rvice that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition。 The value added by the uniqueness of the product may allow the firm to charge a premium price for it。 The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product。 Becau of the product's unique attributes， if suppliers increa their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily。
