Porter’s four competitive strategies are very instrumental to success in the corporate world today. There are four main paradigms to this competitive strategy. These are cost focus, cost leadership, differentiation focus and differentiation leadership. Cost focus entails a company striving to have prices that are lower than the competition in order to undercut the competition in the market. Cost leadership entails economizing across the entire organization in order to achieve efficiency. Differentiation focus entails venturing into a service or product base that is different from what is available in the market therefore creating diversity. Differentiation has to do with a company packaging itself as being unique in the market. The competitive …show more content…
This use of resources has to be strategic in nature in order to ensure that the organization in fact yields the maximum output from the resources in question. The structure of the organization is responsible for elements such as the delegation of tasks to various employees. In instances where the organization is overwhelmed or is not prepared to take part in a given venture then this very same structure will be responsible for the outsourcing of the relevant tasks to capable parties to handle them on behalf of the organization (High, …show more content…
Cooperation entails two or more entities working alongside each other with the aim of enabling each other. In such an instance the entities in question have a similar goal. However, it might be difficult for one entity to make it to the given goal without the participation of each other. Thus, they work together and in the process enable each other to reach the given goal. Thus, in a situation of cooperation the entities in question have selfish underlying intentions despite the fact that they are working towards a similar goal. Collaboration, on the other hand, involves entities working together on a single goal that is shared by all the entities in question (Muddy, 2009). Thus, in a collaboration each member might be required to perform a specific task but all of these tasks are intertwined and will help all of the involved parties to make it to the ultimate
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Adopting a strategy of differentiation makes firms provide products and services what are distinct in some way valued by customers.
Porter’s generic strategy model states that business units need to decide whether or not they want to focus on differentiating their products or have a focus towards obtaining the lowest cost possible (Parnell, 2014). Porter’s model also states that business units need to decide whether or not
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
According to article call “Porter’s Five Forces Model/Strategy Framework” it stated, “The Five Forces Model was developed by Michael E. Porter to help companies assess the nature of an industry’s competitiveness and develop corporate strategies accordingly. “ (Martin, 2014). According to article call “Porter’s Five Forces Model/Strategy Framework” it also stated “The framework allows a business to identify and analyze the important forces that determine the profitability of an industry.” (Martin, 2014). According to article call “Porter’s Five Forces: Analyzing the Competition”. It stated that “
However, RLK’s competitors are downsizing and outsourcing R&D and exploiting on the cost advantages. If RLK decides to invest more money into R&D and should the new product stall on launch, they face the danger of becoming bankrupt.
Publix strives to utilize the industry-wide differentiation strategy. Although Publix isn’t open 24/7 and does not have self-checkout (which also plays a role in its strategy), it focuses on providing the best customer service and facility presentation. The grocery store chain sets itself apart from the competition by keeping their stores as neat, organized and clean as possible; as well as Publix strives to provide the highest degree of customer service and accommodation as possible. Not only is the staff friendly and knowledgeable, they are encouraged to assist customers to the best of their abilities, they even help with carrying out the groceries to your car and assist in loading. As mentioned before,
New businesses will take longer to thrive with the United States falling economy. The faltering job market and the deepening slump in housing threaten to hurt consumer spending. Consumers are becoming more conscious of their spending and therefore using cash to pay for smaller necessary purchases. The cost of entertainment and other presumed luxuries may be pushed to the background by most families, when having to choose whether to pay for a bill or treat the family out. Thriving businesses will understand the need to provide a service or product at affordable prices.
Porter, Michael E. "From competitive advantage to corporate strategy." Harvard Business Review (1987): 43-59. Print. May 2014.
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
Both Porter and Miles and Snow’s strategy typologies are based on the concept of strategic equifinality, or the ability for firms to be successful via differing managerial strategies (Hambrick, 2003, p. 116). Porter 's strategy is more generic while Miles and Snow’s is more specific in nature. Porter’s generic strategy typology is based on economic factors centering on the source of a firm’s competitive advantage and the scope of a firm’s target market (González-Benito & Suárez-González, 2010). Porter’s typology emphasizes a firm’s cost, product differentiation or non-differentiation and market focus. When utilizing Porter’s strategy typology, a firm must first decide to target its products toward the mass market versus a market niche or focus. Secondly, a firm will determine if it wishes to minimize costs or differentiate its products with differentiation meaning that firms will most likely forego lower costs (Parnell, 2014, p. 184). This can lead a firm to develop a myriad of strategies between these options. Strategies which may have or not have focus, may or not be differentiated, may or not be low cost or any combination of strategies. In contrast to Porter, Miles and Snow’s typology is more specific in nature.
...urcing services, the company operation will be became a mess. This is because one organization can’t run a lot of task or project at one time. Therefore an organization need outsourcing in the way to help their organization run smoothly.
Without a successful business strategy put in place the company would fail and be unable to compete with competitors. There would be on way of knowing what resources are required. No planning for the future of the business. If there are no targets set out to achieve there would be no way of measuring how successful the company has been.
In its simplest form, cooperation may involve only two people who work together towards a common goal. Two college students working together to complete a laboratory experiment, or two inter-city youths working together to protect their 'turf' from violation by outsiders are examples. In these cases, solidarity between the members is encouraged and they share together the reward of their cooperation. Social satisfaction is achieved by a group of people working together or doing activities together. Even though cooperation isn’t that practical with our people in our own society it can be found within the youths involved in sports and other recreational activities. Cooperation within students in schools as mentioned as an example, is practiced on a regular basis during group discussions and group presentations. But speaking about cooperation and society together, cooperation is very essential for society to continue grow stronger and a good living residence for
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.