Michael Porter's Generic Strategies

Overview

• Described in Michael Porter's book, "Competitive Advantage: Creating and Sustaining Superior Performance" (1985).
• Four strategies for organizations to choose from:
  • Cost Leadership
  • Differentiation
  • Cost Focus
  • Differentiation Focus

Strategies

Cost Leadership

• Market: Large market or high demand
• Approach: Offering the lowest possible price

Differentiation

• Market: Large market
• Approach: Offering products or services with unique features

Cost Focus

• Market: Niche or targeted market with little competition
• Approach: Offering the lowest possible price

Differentiation Focus

• Market: Niche or targeted market
• Approach: Offering products with unique features

Hybrid Strategies

• Many companies adopt a hybrid strategy integrating components from the four generic strategies.

Further Resources

• Detailed explanations and resources like a 4-minute video and a practical scientific article are available on Toolshero.nl.