It is very hard to apply and understand Michael Porter's strategy frameworks. That's why i prepared this summary for myself and to whom feels same feelings about it...
2. Porter’s Generic Strategies
• suitable for big companies and not
suitable for small companies
• aim: reduce costs per unit throughout
value chain encompassing all
functional groups (finance, purchase,
marketing, inventory etc..)
• price sensitive customers
• market is big, standardized products
• incompatible with the simultaneous
adoption of other strategies (isolation
of other strategies)
• computes with other cost leadership
or differentiation or differentiation
with focus
• suitable for big companies and not
suitable for small companies
• aim: differentiation with attributes
throughout predominant intensity in
any one or several of the functional
groups (finance, purchase, marketing,
inventory etc..)
• relatively price intensive customers
• market is competitive or saturated
• may do so in isolation of other
strategies or in conjunction with
focus strategies (requires more initial
investment)
• suitable for big companies in
conjuction with DIFFERENTIATION or
suitable for small companies
• aim: differentiation with attributes
throughout predominant intensity in
any one or several of the functional
groups (finance, purchase, marketing,
inventory etc..) in certain segments
• price intensive customers
• market size is small
• suitable for big companies with
DIFFERENTIATION or suitable for
small companies
• aim: cost reduction in some segments
• price intensive customers
• market size is small
to choice which strategies
regarding :
- company size
- company’s access to
resources
- industry and competitive
analysis
3. Porter’s Diamond Model
to choice which strategies
regarding :
- company size
- company’s access to
resources
- industry and competitive
analysis