PORTER’S GENERIC STRATEGIES: DIFFERENTIATION LEADERSHIP

Question 1

What did Porter suggest?

Answer 1

Porter suggested that businesses should follow a very clear strategy - It doesn’t matter what the market is (could be cars, coffee, clothing etc) your business should follow a particular strategy in terms of the market, weather it’s focusing on a niche or mass market, and what your source of competitive advantage is it selling at a low cost or differentiating products.

Question 2

What is Porter’s key point

Answer 2

Porter’s key point is that businesses that are confused about what their strategy is, or don’t follow a clear strategy or are stuck in the middle somewhere may struggle to survive.

Question 3

What is “differentiation leadership”

Answer 3

Differentiation leadership: a strategy of providing a differentiated product to a mass market.

Question 4

What are the requirements of Porter’s generic stratgies

Answer 4

Strong brand image

A large group of consumers willing to pay a premium price

The need to be highly innovative - investment in market research and development

Question 5

What are the benefits of Porter’s generuc strategies

Answer 5

High sales possible at a premium price

Money for reinvestment and further development