Michael Porter's Generic Strategies

May 14, 2024

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.