THEME 3, Porters Matrix Flashcards
(7 cards)
What is Porters matrix?
A framework for businesses to analyse and choose competitive strategies based on their source of competitive advantage and market type
What is competitive advantage?
A condition or circumstance that puts a company in a favourable or superior business position.
What are the 2 ways of achieving competitive advantage in a mass market?
Cost leadership
Differentiation leadership
What is cost leadership?
When the businesses objective is aiming to be the lowest cost producer in the industry.
Usually involves economies of scale
Best in markets with little cost differentiation.
How to achieve cost leadership?
High productivity and efficiency
High capacity utilisation
Access to most effective distribution channels
Effective use of technology
Lean production methods
What is differentiation leadership?
Aims to achieve competitive advantage across whole industries
Targets larger markets
How to achieve differentiation leadership?
Superior product quality
Strong branding
Consistent promotional support
Industry-wide distribution across the whole world
