Skip to main content

Once again, thinking on the subject of corporate strategy has provided insights that can clarify the decisions that have to be made

Michael Porter has highlighted the distinction between two fundamental approaches or, as he terms them, “generic strategies”. One of these is to concentrate upon becoming competitive through “cost leadership”, i.e. by
having the lowest costs in the industry (though this does not, of course,
necessarily mean having the lowest selling prices). The other is to concentrate
upon “differentiation”, which means offering the customer superior quality and
a unique package of features. Clearly, no enterprise can afford to ignore either
costs or quality completely. Porter believes, however, that no company can hope
to dominate its field in both cost and differentiation, and that any attempt to do
so will lead to being “stuck in the middle” with neither the most competitive
costs nor superior product features.

Practical examples of the strategic choices to be made are:
– offering state-of-the-art technologically advanced products not available
from other firms or available from very few (differentiation), and regularly
abandoning these products and moving on when the technology becomes
common and prices start to drop;
– providing service to clients with speed and reliability superior to that offered
by competitors (a further form of differentiation);
– selling high-quality and particularly reliable products for relatively high
prices, and/or products tailored to the particular needs of clients who find
standard products unsatisfactory (differentiation again);
– selling standard products of acceptable but not particularly high quality at
very competitive prices (cost leadership).


Popular posts from this blog

Why Adding More Women To The Boardroom Is Key For Success And Higher ROI

Experienced CEO and founder of How Women Lead, venture capitalist and sought-after speaker on female entrepreneurship. getty The past years bank collapses, return-to-office controversies, activist …

'Make, Measure, Monitor' With Business Intelligence Systems - Business Intelligence Dashboards

  Business intelligence describes a toolset and process, which systematically organizes and displays your company data. Intelligence systems assist you in making strategic and operative decisions based on detailed analytic data and reports. Implementing a business intelligence solution not only requires programming qualifications but also necessitates a detailed understanding of business processes, business administration, and business economics.  With that being said, in developing your business intelligence solution, you do not have to “start from scratch”, but instead base it on well-established open-source products and adapt it to your specific requirements by adding additional custom components, interfaces, and modules.  Cornerstones of the Development Process:   - Analysis of your company-specific informational requirements.   - Analysis of existing core-data (e.g. in ERP systems and MDM systems).  - Visualisation of processes using flow charts.   - Decision, whether classic met

Here's How a Board of Directors Should Function (Family Business)

    Essentially a Board should include executives whom you respect and who have the business and personal experience relevant to the key issues that the business must address. Their only interest in your business is that the business is profitable, grows stronger and lasts longer. Here are some attributes to look for when selecting   people to serve on your Board:     Expertise   Every advisor should have specific experience in at least one area to benefit your business. Areas of expertise include technical knowledge of the product or service, manufacturing, distribution, marketing, human resources, finance or management.   It is often helpful to have someone with experience in the same industry.     Willingness to serve   Many business executives would be flattered to be asked to serve on your Board as they would consider it a personal and professional challenge and a way to give back to the business community. Others would not.     A highly qualified person may serve no useful p