Porter's generic strategies framework — Industry examples
Porter’s framework is shown in the diagram on the right. According to Porter, the previously mentioned factors combine to create four generic strategies that organisations can pursue.
The motor vehicle industry is used as an example in the analysis of these four strategies:
- Cost leadership — where the organisation’s resources and attention are directed towards minimising costs to operate more efficiently than the competition (for example, Hyundai and KIA).
- Differentiation — where the organisation’s resources and attention are directed towards distinguishing its products from those of the competition (for example, BMW and Volvo).
- Focused cost leadership — where the organisation concentrates on one special market segment and tries in that segment to be the provider with lowest costs (for example, Suzuki).
- Focused differentiation — where the organisation concentrates on one special market segment and tries to offer customers in that segment a unique product (for example, Land Rover and Subaru).