porter - MANAGEMENTPOLICYANDSTRATEGY SESSIONVI...

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Prof.Sushil\IITD\Session-VI 1 MANAGEMENT POLICY AND STRATEGY SESSION - VI Generic and Grand Strategies Prof. Sushil Department of Management Studies Indian Institute of Technology, Delhi INDIA Email: [email protected]
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  Prof.Sushil\IITD\Session-VI 2 Generic Strategies Differentiation Low-cost  leadership  Focus
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  Prof.Sushil\IITD\Session-VI 3 PORTER’S GENERIC STRATEGIES 1. Cost  Leadership 2. Differentiation 3 A. Cost Focus 3 B. Differentiation         Focus Narrow  Target Broad  Target Differentiation Lower Cost  Competitive  Advantage Competitive Score
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  Prof.Sushil\IITD\Session-VI 4 REQUIREMENTS FOR GENERIC COMPETITIVE  STRATEGIES Generic  Commodity Required Common Organizational Strategy Skills and Resources Requirements Overall cost  Sustained capital investment    Tight cost control leadership     access to capital    Frequent, detailed control      reports    Process engineering skills    Structured organization     and responsibilities    Intense supervision of labour   Incentives based on    Products designed for ease        meeting strict quantitative    Low-cost distribution system    targets in manufacture Differentiation    Strong marketing abilities    Strong coordination     Product engineering      Creative flare   product development, and  marketing
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  Prof.Sushil\IITD\Session-VI 5 REQUIREMENTS FOR GENERIC COMPETITIVE  STRATEGIES CONTD…    Strong capability in basic    Subjective measurement and     research      incentives instead of       quantitative measures    Corporate reputation for     Amenities to attract highly      quality or technological     skilled labour, scientists, or      leadership     creative people    Long tradition in the industry     or unique combination of skills     drawn from other businesses    Strong cooperation from     channels Focus    Combination of the above     Combination of the above policies     policies directed at the     directed at the regular strategic     particular strategic target    target
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  Prof.Sushil\IITD\Session-VI 6 RISKS OF THE GENERIC STRATEGIES Risks of Cost Leadership Risks of Differentiation Risk of Focus Cost of leadership is not Differentiation is not The focus strategy is  sustained initiated sustained:  Competitors imitate The target segment  Competitors imitate:  Bases for differentiation becomes structurally  unattractive Technology changes becomes less imported to  Structure erodes Other bases for cost buyers  Demand disappears leadership erode Proximity in differentiation Cost proximity is lost Broadly targeted 
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This note was uploaded on 03/04/2011 for the course MGMT 202 taught by Professor Sushil during the Fall '01 term at Indian Institute of Technology, Delhi.

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porter - MANAGEMENTPOLICYANDSTRATEGY SESSIONVI...

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