Porter’s Generic Strategies 波特的一般竞争战略

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 secondary 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 itself 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 these strengths in

either a broad or narrow scope, three 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 Porter's generic strategies:

Porter's Generic Strategies

Advantage

Target Scope

Low Cost

Product

Uniqueness

Broad

(Industry Wide)

Cost Leadership

Strategy

Differentiation

Strategy

Narrow

(Market Segment)

Focus

Strategy

(low cost)

Focus

Strategy

(differentiation)

Cost Leadership Strategy

This generic strategy calls for being the low cost producer in an industry for a given 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

market share

. In the event of a price war, the firm can maintain some

profitability while the competition suffers losses. 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.

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 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 succeed 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.

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Skill in designing products for efficient manufacturing, for example, having a small component count

to shorten the assembly process.

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