Week 3/ DQ3Thread/ Roberto Luft MBA 580
3. Based on your research, does your company depend upon one of the following three generic
strategies: overall cost leadership, differentiation, or focus (see Pearce and Robinson, pp.160-
162)? If so, what competitive advantage is offered by the generic strategy? What risks are
generated by the generic strategy?
Stewart Title (Stewart) evaluates market focus as a way to take advantage of larger competitors
who simply do not want to be bothered with or cannot provide services at lower costs (Pearce
and Robinson, 2005) (or cost efficiency). With the generic strategy of focus, Stewart has thrived
and grown because it serves narrow market niches in the title and escrow industry. Also, best
business practices, like Stewart, realize that focus allows it to complete on the basis of low cost,
differentiation, and rapid response (also known as speed-based strategy) against larger
competitors with greater response.
Stewart Title was the first to develop SureClose® online transaction management system and the
eClosingRoom™ electronic closing platform, which is technology allowing “virtual” closings, rather
than the physical presence of buyer and seller (Stewart, 2006). By remaining within its chosen
product market, Stewart has been able to extract the most from its proprietary technology and
knowledge thereby minimizing any risk associated with unrelated diversification (Pearce et al.,
2005). However, there are several risks of a focus strategy. With the development of SureClose®
and the eClosingRoom™, Stewart opened the door for major competitors to sit back and wait for
these products to “prove” the market and, subsequently, build upon these platforms (Pearce et al,
Stewart mitigates this risk by finding ways to leverage its successful products in emerging
industries. Emerging industries provides Stewart the ability (or opportunity) to shape the industry
to its advantage (Pearce et al, 2005).
Pearce, J. & Robinson, R. (2005).
(9th ed.). New York: McGraw-Hill.
Stewart. (2006, January).