Essay on Porter's Generic Strategy

2884 Words Dec 2nd, 2012 12 Pages
The Discipline of Market Leaders Customer Value Model
(Porter’s generic strategies with particular reference to Apple Inc)


Table of contents
Introduction………………………………………………………………………………………………….
Porter’s three Generic Competitive Strategies………………………………………………………….
Cost Leadership……………………………………………………………………………………………
Differentiation……………………………………………………………………………………………….
Focus or Niche strategy…………………………………………………………………………………...
Apple Inc…………………………………………………………………………………………………….
Identification and Critical Evaluation of the Company’s Existing Strategies…………………………
Apple Inc Cost leadership Strategy………………………………………………………………………
Apple Inc Differentiation
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However, companies also have a second opportunity to generate profitability. Companies can optimize their position within a certain industry, and thereby obtain great profits - even if the industry in general may have below-average profitability. Therefore, it is claimed that companies, if they position their products or services effectively, may be able to generate great profits, even if the industry is generally crowded with players all wanting a piece of the pie. Michael E. Porter proposes that companies have the opportunity to position their products or services by either costs or differentiation, and that this positioning can be applied to either a narrow or a broad scope of buyers.
This results in three generic strategies, which are called Cost Leadership Strategy, Differentiation Strategy and Focus Strategy. These strategies can be applied at the business unit level, and are as such generic, because they are not firm or industry dependent. Therefore, each company may adopt one of these strategies to obtain greater profits, even though other players in the industry pursue completely other strategies.
If a company wishes to pursue the strategy of cost leadership, it has to be the low cost producer (Porter, 1980). A firm may gain cost advantage through economies of scale, proprietary technology, cheap raw material, etc. Organizations that achieve cost leadership can benefit either by gaining market share through…

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