Student: Porter Generic Strategies and Competitive Advantage Essay

Submitted By michellelxxuwo
Words: 485
Pages: 2

MOS 4410 Chapter 4&5 video

The New Science of Human Capital

The need to improve the quality and the quantity
Where the talent has the biggest impact?

Business strategy and talent
Break down into components

Process, recourse, supporting document

How much difference that we should make to have a better vision

HR management

What’s the problem, where talents can make a difference?

Employees make a difference

To determine who are those people?
How to develop them?

Performance makes a difference, that area, customer service is important

Intuitive

Porter’s Strategies – Generic Strategies

Competitive advantage – what you make above the average

Generic strategies – source of competitive advantages

Porter’s Generic Strategies
Competitive scope

Competitive Advantage

Low cost
Higher cost

Broad
Overall cost leadership
Differentiation

Narrow
Cost focus
Differentiation focus

Narrow market Business travel
Low cost
Easy Jet
Higher cost
Charted
Broad market Airline
Low cost
Ryan air
Higher cost
BA/ Virgin

Cost leadership
The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost
Costs are shaved off every element of the value chain
Products tend to be “no frills.” However, low cost does not always lead to low price
Producers could price at competitive parity, exploiting the benefits of a bigger margin than competitors
Some organization, such as Toyota, area very good not only at producing high quality autos at a low price, but have the brand and marketing skills to use a premium pricing policy

Differentiation
Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin
The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments, generating a higher than average price
For example, British Airways differentiates its service. The differentiating organization will…