Presented By:Basant Singh

Introduction Porters Generic Strategy A) Cost Leadership Strategy B) Differentiation Strategy C) Focus or Strategic Scope

Michael Porter has described a category scheme consisting of three general types of strategies. These three generic strategies are defined along two dimensions: strategic scope and strategic strength. In particular he identified two competencies that he felt were most important: product differentiation and product cost (efficiency). Porter simplifies the scheme by reducing it down to the three best strategies. They are cost leadership, differentiation, and market segmentation.

This strategy appeal to cost-conscious or pricesensitive customers. It is achieved by having the lowest price in the target market. There are three main ways to achieve this: The first approach is achieving a high asset turnover. The second dimension is achieving low direct and indirect operating costs. The third dimension is control over the supply/procurement chain to ensure low costs

Differentiate the products in some way in order to compete successfully. 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.

This dimension is not a separate strategy, but describes the scope over which the company should compete based on cost leadership or differentiation. The firm can choose to compete in the mass market with a broad scope, or in a defined, focused market segment with a narrow scope. In adopting a narrow focus, the company ideally focuses on a few target markets (also called a segmentation strategy). In adopting a broad focus , the firm must ascertain the needs and wants of the mass market, and compete either on price or differentiation depending on its resources and capabilities.