Generic Strategy - Porter
THEME 8: GENERIC STRATEGIES
1. Introduction. 2. The Porter's approach: competitive strategies (cost advantage, differentiation advantage and specialization). 3. The Ansoff's approach: the Growth Matrix (market penetration, product development, market development, and diversification). 4. An integrating approach.
© Alfonso VARGAS SÁNCHEZ 1
Hope is not a strategy, specially when internationalizing the company is the intention
2
Strategic Analysis: Compulsory Questions
What business is the organisation in? manufacturing/retail, etc. Who do they compete with, and how do they compete? Who are the organisation’s stakeholders? Key stakeholders & their influence. What are the external drivers for change? – PEST model, macro environment. – Five Forces model, micro/industry environment. How does the organisation gain value? – Resource audit, tangible & intangible. – Value Chain and Value System analysis. Assess the balance in the corporate portfolio, BCG matrix. How should I compete? Porter’s generic strategies: low cost, differentiation, specialization. What are my strategic movements? Mergers/Acquisitions, etc.
3
Mission - Vision - Values PEST analysis
Competitive Forces
P.C. Industry Attractiveness S C.C. S.P. B
(threats & opportunities)
Value Chain: activities & linkages
F.I. T.D. HH.RR. PR.
Value System (linkages): other SBUs (synergies) & suppliers buyers’ value chains
Strategy formulation, at three levels: C–B–F Company’s Competitive Position (Resourcebased View): cost advantage or uniqueness (strengths & weaknesses)
I.L.
OP.
O.L.
M&S
A-S.S.
STRATEGY
ELEMENTS LEVELS BUSINESS SCOPE RESOURCES & CAPABILITIES COMPETITIVE ADVANTAGES SYNERGIES
CORPORATE
(1)
(1)
(1)
BUSINESS
(2)
(2)
(2)
FUNCTION
(3)
(3)
5
STRATEGIC ADVANTAGE
PORTER’S APPROACH
Exclusivity perceived by the customer
Position of low costs
COMPETITIVE SITUATION
Broad (the whole DIFFERENTIATION
1. Introduction. 2. The Porter's approach: competitive strategies (cost advantage, differentiation advantage and specialization). 3. The Ansoff's approach: the Growth Matrix (market penetration, product development, market development, and diversification). 4. An integrating approach.
© Alfonso VARGAS SÁNCHEZ 1
Hope is not a strategy, specially when internationalizing the company is the intention
2
Strategic Analysis: Compulsory Questions
What business is the organisation in? manufacturing/retail, etc. Who do they compete with, and how do they compete? Who are the organisation’s stakeholders? Key stakeholders & their influence. What are the external drivers for change? – PEST model, macro environment. – Five Forces model, micro/industry environment. How does the organisation gain value? – Resource audit, tangible & intangible. – Value Chain and Value System analysis. Assess the balance in the corporate portfolio, BCG matrix. How should I compete? Porter’s generic strategies: low cost, differentiation, specialization. What are my strategic movements? Mergers/Acquisitions, etc.
3
Mission - Vision - Values PEST analysis
Competitive Forces
P.C. Industry Attractiveness S C.C. S.P. B
(threats & opportunities)
Value Chain: activities & linkages
F.I. T.D. HH.RR. PR.
Value System (linkages): other SBUs (synergies) & suppliers buyers’ value chains
Strategy formulation, at three levels: C–B–F Company’s Competitive Position (Resourcebased View): cost advantage or uniqueness (strengths & weaknesses)
I.L.
OP.
O.L.
M&S
A-S.S.
STRATEGY
ELEMENTS LEVELS BUSINESS SCOPE RESOURCES & CAPABILITIES COMPETITIVE ADVANTAGES SYNERGIES
CORPORATE
(1)
(1)
(1)
BUSINESS
(2)
(2)
(2)
FUNCTION
(3)
(3)
5
STRATEGIC ADVANTAGE
PORTER’S APPROACH
Exclusivity perceived by the customer
Position of low costs
COMPETITIVE SITUATION
Broad (the whole DIFFERENTIATION