(完整)Porter’s Generic Strategies 波特的一般竞争战略

(完整)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

(完整)Porter’s Generic Strategies 波特的一般竞争战略

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。

•

Skill in designing products for efficient manufacturing, for example， 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。 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 as 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。 The 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 product's unique attributes， if suppliers increase their

prices the firm 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 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 strategies may be

(完整)Porter’s Generic Strategies 波特的一般竞争战略

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 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 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 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 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。 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 successful 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 often 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 not 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 entered the market with a lower-quality product that better met

the overall needs of the customers.

(完整)Porter’s Generic Strategies 波特的一般竞争战略

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 generic

strategies in the context of the Porter's five forces.

Generic Strategies and Industry Forces

Industry

Force

Cost Leadership

Generic Strategies

Differentiation

Focus

Ability to cut

price in Customer loyalty Focusing develops core

Entry

retaliation can discourage competencies that can

Barriers

deters potential potential entrants.

act as an entry barrier.

entrants。

Large buyers have

Ability to offer less power to

lower price to negotiate because

powerful buyers.

of few close

alternatives。

Large buyers have less

power to negotiate

because of few

alternatives。

Buyer

Power

Suppliers have power

Better able to pass because of low volumes,

Better insulated

Supplier on supplier price but a differentiation-from powerful

Power

increases to focused firm is better

suppliers。

customers。

able to pass on supplier

price increases。

Customer's become

Can use low attached to

Specialized products &

Threat of price to defend differentiating

core competency protect

Substitutes

against attributes,

against substitutes.

substitutes。

reducing threat of

substitutes。

Rivalry

Better able to Brand loyalty to Rivals cannot meet

compete on keep customers from differentiation—focused

price.

rivals.

customer needs.