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Under Porter's framework, enterprises have four generic strategies available to them whereby they can attain competitive advantage, namely
Cost Leadership;
Differentiation;
Cost focus; and
Focused Differentiation.
These four generic strategies can be understood in two dimensions: -
1. Competitive Advantage
Porter suggests two basic strategic stances that enterprises can adopt to attain Competitive Advantage.
Low cost
Product Differentiation.
In the long run, firms succeed relative to their competitors if they possess sustainable competitive advantage in either of these two, subject to reaching some threshold of adequacy in the other.
2. Competitive Scope
The Competitive Scope is the breadth of the enterprise's target markets within its industry, i.e., the range of product varieties it offers, the distribution channels it employs, the types of buyers it serves, the geographic areas in which it sells, and the array of related industries in which it competes.
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* Contributed by: -
Varun Dawar & Vaibhav Hari,
IMT, Ghaziabad.
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