Porter’s-Generic-Strategies-波特的一般竞争战略

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1、精选优质文档-倾情为你奉上Porters Generic StrategiesIf the primary determinant of a firms profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. Even though an industry may have below-average profitability, a firm that is

2、 optimally positioned can generate superior returns.A firm positions itself by leveraging its strengths. Michael Porter has argued that a firms strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three

3、 generic strategies result: cost leadership, differentiation, and focus. These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent. The following table illustrates Porters generic strategies: Porters Generic Strategies

4、Target ScopeAdvantageLow CostProduct UniquenessBroad(Industry Wide)Cost LeadershipStrategyDifferentiationStrategyNarrow(Market Segment)FocusStrategy(low cost)FocusStrategy(differentiation)Cost Leadership Strategy This generic strategy calls for being the low cost producer in an industry for a given

5、level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain . In the event of a price war, the firm can maintain some profitability while the competition suffers losses. Even without a price

6、 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.Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining

7、 unique access to a large source of lower cost materials, making optimal outsourcing and decisions, or avoiding some costs altogether. If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage based on cost leadership.Firms that s

8、ucceed in cost leadership often have the following internal strengths: Access to the capital required to make a significant investment in production assets; this investment represents a barrier to entry that many firms may not overcome. Skill in designing products for efficient manufacturing, for ex

9、ample, having a small component count to shorten the assembly process. High level of expertise 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

10、. As technology improves, the competition may be able to leapfrog the production capabilities, thus eliminating the competitive advantage. Additionally, several firms following a focus strategy and targeting various narrow markets may be able to achieve an even lower cost within their segments and a

11、s a group gain significant market share. Differentiation Strategy A differentiation strategy calls for the development of a product or service 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. T

12、he 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. Because of the products unique attributes, if suppliers increase their prices the fi

13、rm may be able to pass along the costs to its customers who cannot find substitute products easily. Firms that succeed in a differentiation strategy often have the following internal strengths: Access to leading scientific research. Highly skilled and creative product development team. Strong sales

14、team with the ability to successfully communicate the perceived strengths of the product. Corporate reputation for quality and innovation.The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. Additionally, various firms pursuing focus s

15、trategies may be able to achieve even greater differentiation in their market segments. Focus Strategy The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better

16、serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less

17、bargaining power with their suppliers. However, firms pursuing a differentiation-focused strategy may be able to pass higher costs on to customers since close substitute products do not exist. Firms that succeed in a focus strategy are able to tailor a broad range of product development strengths to

18、 a relatively narrow market segment that they know very well. Some risks of focus strategies include imitation and changes in the target segments. Furthermore, it may be fairly easy for a broad-market cost leader to adapt its product in order to compete directly. Finally, other focusers may be able

19、to carve out sub-segments that they can serve even better. A Combination of Generic Strategies - Stuck in the Middle? These generic strategies are not necessarily compatible with one another. If a firm attempts to achieve an advantage on all fronts, in this attempt it may achieve no advantage at all

20、. For example, if a firm differentiates itself by supplying very high quality products, it risks undermining that quality if it seeks to become a cost leader. Even if the quality did not suffer, the firm would risk projecting a confusing image. For this reason, Michael Porter argued that to be succe

21、ssful over the long-term, a firm must select only one of these three generic strategies. Otherwise, with more than one single generic strategy the firm will be stuck in the middle and will not achieve a competitive advantage. Porter argued that firms that are able to succeed at multiple strategies o

22、ften do so by creating separate business units for each strategy. By separating the strategies into different units having different policies and even different cultures, a corporation is less likely to become stuck in the middle. However, there exists a viewpoint that a single generic strategy is n

23、ot always best because within the same product customers often seek multi-dimensional satisfactions such as a combination of quality, style, convenience, and price. There have been cases in which high quality producers faithfully followed a single strategy and then suffered greatly when another firm

24、 entered the market with a lower-quality product that better met the overall needs of the customers. Generic Strategies and Industry Forces These generic strategies each have attributes that can serve to defend against competitive forces. The following table compares some characteristics of the gene

25、ric strategies in the context of the Porters five forces. Generic Strategies and Industry ForcesIndustryForceGeneric StrategiesCost LeadershipDifferentiationFocusEntryBarriersAbility to cut price in retaliation deters potential entrants.Customer loyalty can discourage potential entrants.Focusing dev

26、elops core competencies that can act as an entry barrier.BuyerPowerAbility to offer lower price to powerful buyers.Large buyers have less power to negotiate because of few close alternatives.Large buyers have less power to negotiate because of few alternatives.SupplierPowerBetter insulated from powe

27、rful suppliers.Better able to pass on supplier price increases to customers.Suppliers have power because of low volumes, but a differentiation-focused firm is better able to pass on supplier price increases.Threat ofSubstitutesCan use low price to defend against substitutes.Customers become attached to differentiating attributes, reducing threat of substitutes.Specialized products & core competency protect against substitutes.RivalryBetter able to compete on price.Brand loyalty to keep customers from rivals.Rivals cannot meet differentiation-focused customer needs.专心-专注-专业