porters strategy

Question 1

what are porters strategies and what are they for?

Answer 1

• COMPETITIVE ADVANTAGE
  1. low cost operator = making products at the lowest cost, may include outsourcing, lean management, standard no frills low cost products
  2. high differentiation
  3. niche market
  4. mass market

Question 2

uses of porters strategy

Answer 2

• Helps decide future strategy and budgets
• Helps analyse future opportunities or problems with their product portfolios
• Resources can then be transferred, i.e. the surplus cash from cash cows to the stars and the question marks, and to close down or sell off the dogs.

Question 3

limitations of portfolio analysis

Answer 3

• High market share does not always lead to high profits. There are high costs also involved with high market share
• Growth rate and relative market share are not the only indicators of profitability
• Too simplistic – more than four cells?