8/12/2016

Porter'sGenericCompetitiveStrategies(waysofcompeting)
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IfM>Research>DecisionSupportTools>Porter'sGenericCompetitiveStrategies

DecisionSupportTools
Porter'sGenericCompetitiveStrategies(waysof
competing)

Overview
AffinityCharting
AnalyticalHierarchyProcess

Afirm'srelativepositionwithinitsindustrydetermineswhetherafirm'sprofitabilityisaboveor
belowtheindustryaverage.Thefundamentalbasisofaboveaverageprofitabilityinthelongrun
issustainablecompetitiveadvantage.Therearetwobasictypesofcompetitiveadvantageafirm
canpossess:lowcostordifferentiation.Thetwobasictypesofcompetitiveadvantagecombined
withthescopeofactivitiesforwhichafirmseekstoachievethem,leadtothreegeneric
strategiesforachievingaboveaverageperformanceinanindustry:costleadership,
differentiation,andfocus.Thefocusstrategyhastwovariants,costfocusanddifferentiation
focus.

BalancedScorecard
Benchmarking
BostonPlot
Brainstorming
CapabilitiesandCompetences
CapabilityandMaturity
Cause&Effect
CheckSheetsandCheckLists
Clustering
ConflictAnalysis
ControlCharts
CorporateStrategy
Cost/Benefit/RiskAnalysis
CriteriaRatingForm

1.CostLeadership

CriticalPathAnalysis
CustomerSurveysandInterviews

Incostleadership,afirmsetsouttobecomethelowcostproducerinitsindustry.Thesourcesof
costadvantagearevariedanddependonthestructureoftheindustry.Theymayincludethe
pursuitofeconomiesofscale,proprietarytechnology,preferentialaccesstorawmaterialsand
otherfactors.Alowcostproducermustfindandexploitallsourcesofcostadvantage.ifafirm
canachieveandsustainoverallcostleadership,thenitwillbeanaboveaverageperformerinits
industry,provideditcancommandpricesatorneartheindustryaverage.

2.Differentiation
Inadifferentiationstrategyafirmseekstobeuniqueinitsindustryalongsomedimensionsthat
arewidelyvaluedbybuyers.Itselectsoneormoreattributesthatmanybuyersinanindustry
perceiveasimportant,anduniquelypositionsitselftomeetthoseneeds.Itisrewardedforits
uniquenesswithapremiumprice.

3.Focus
Thegenericstrategyoffocusrestsonthechoiceofanarrowcompetitivescopewithinan
industry.Thefocuserselectsasegmentorgroupofsegmentsintheindustryandtailorsits
strategytoservingthemtotheexclusionofothers.
Thefocusstrategyhastwovariants.
(a)Incostfocusafirmseeksacostadvantageinitstargetsegment,whilein(b)differentiation
focusafirmseeksdifferentiationinitstargetsegment.Bothvariantsofthefocusstrategyrest
ondifferencesbetweenafocuser'stargetsegmentandothersegmentsintheindustry.The
targetsegmentsmusteitherhavebuyerswithunusualneedsorelsetheproductionand
deliverysystemthatbestservesthetargetsegmentmustdifferfromthatofotherindustry
segments.Costfocusexploitsdifferencesincostbehaviourinsomesegments,while
differentiationfocusexploitsthespecialneedsofbuyersincertainsegments.

References
Porter,MichaelE.,"CompetitiveAdvantage".1985,Ch.1,pp1115.TheFreePress.New
York.

DataSources
DecisionTrees
DemingCycle
Deming's14points
DrawingPackages
FiniteCapacityScheduling
FlexibilityFramework
FlowCharts
ForcefieldAnalysis
From/toChart
GapAnalysis
Graphs,Gantt,Histograms&Bar
Charts
HewlettPackardReturnMap
Importance/PerformanceMatrix
InnovationFunnel
JITJustinTimemanufacturing
Kanbans
ManufacturingDecisionAreas
ManufacturingResourcePlanning
Marketing,4Psof
MaterialsRequirementsPlanning

Finduson

Matrices

Matrix2x2
Mintzberg's5PsforStrategy
Polarcharts,Radarcharts

http://www.ifm.eng.cam.ac.uk/research/dstools/portersgenericcompetitivestrategies/

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8/12/2016

Porter'sGenericCompetitiveStrategies(waysofcompeting)
Porter's5Forces
Porter'sGenericCompetitive
Strategies
Porter'sValueChain
ProductLifeCycle
ProgrammeEvaluationandReview
Technique(PERT)
QualityFramework
QualityFunctionDeployment(QFD)
QualityAwardsandOrganisations
Quality,Time,Cost&Flexibility
QuantitativeDecisionMaking
RobustnessAnalysis
SensitivityAnalysis
StrategicOptionsDevelopmentand
Analysis(SODA)
SoftSystemsMethodology
Spreadsheetsanddatabases
StatisticalSoftware
StrategicAssessmentModel
StrategicAssumptionsSurfacingand
Testing
StrategicChoiceApproach
SWOT(Strengths,Weaknesses,
Opportunities,Threats)
TimeFramework
TQMTools
TradeoffModels
ValueChain(Porter's)
Vroom'sexpectancytheory

InstituteforManufacturing,Dept.ofEngineering,17CharlesBabbageRoad,Cambridge,CB30FS
Callus:+44(0)1223766141Emailus:ifmenquiries@eng.cam.ac.uk

http://www.ifm.eng.cam.ac.uk/research/dstools/portersgenericcompetitivestrategies/

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