Concept - Low-Cost Strategy

Concept - Low-Cost Strategy - Porter's Generic Strategies...

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Porter's Generic Strategies If the primary determinant of a firm's profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. Even though an industry may have below-average profitability, a firm that is optimally positioned can generate superior returns. A firm positions itself by leveraging its strengths. Michael Porter has argued that a firm's strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership , differentiation , and focus . These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent. The following table illustrates Porter's generic strategies: Porter's Generic Strategies Advantage Target Scope Low Cost Product Uniqueness Broad (Industry Wide) Broad Low Cost Strategy Broad Differentiation
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This note was uploaded on 04/12/2011 for the course MKT 352 taught by Professor Cowart during the Fall '11 term at Grand Valley State University.

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Concept - Low-Cost Strategy - Porter's Generic Strategies...

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