Porters Five Forces and Generic Strategies

2016 ◽  
Author(s):  
Norin Arshed ◽  
Jaydeep Pancholi
Keyword(s):  
Harvard Business School ◽  
Competitive Strategies ◽  
Cost Leadership ◽  
Michael Porter ◽  
Buyer Power ◽  
Fierce Competition ◽  
External Forces ◽  
Commercial Organizations ◽  
Competitive Rivalry ◽  
Generic Strategies

Competition is what keeps organizations and industries alive. Harvard Business School Professor, Michael Porter, was keen to understand the drivers of success in commercial organizations. His research indicated that industry structure mattered more than individual firm behaviour and his Five Forces model (1979) offers his explanation of the sources of competition at industry level. The model is based on the theory of determining the competitive intensity and attractiveness of a market. The five forces within the model include: competitive rivalry, threat of new entry, supplier power, buyer power, and threat of substitution. The model has been widely used by firms to analyse the external environment and specific external forces like competition, government policies, and social and cultural forces (Vining, 2011). Furthermore, to overcome such fierce competition created by the Five Forces model, and to ensure successful survival, Porter (1985) also introduced competitive strategies to gain a competitive advantage. By combining price and market type, Porter suggests these competitive strategies: cost leadership, differentiation, and market segmentation (or focus) to enable a competitive environment to prosper. This chapter concentrates on establishing and understanding the Five Forces model and the generic strategies.

Competitive Strategies and Global Management

2008 ◽  
pp. 2660-2676
Author(s):  
Mingfang Li
Keyword(s):  
Strategic Management ◽  
Future Research ◽  
Extended Model ◽  
Competitive Strategies ◽  
Global Management ◽  
Central Topic ◽  
Michael Porter ◽  
Manufacturing Technologies ◽  
Generic Strategies

Competitive strategies remain a central topic of research in strategic management. Recent conceptual developments and practices reveal possible additional types of competitive strategies due to the advances in information as well as manufacturing technologies. This paper proposes a conceptual extension of the generic strategies originally developed by Michael Porter (1980) to include additional competitive approaches as various combinations and extensions of the original four. Furthermore, this paper applies the extended model of competitive strategies to global strategic management to present a number of propositions. Contributions, limitations and future research are considered.

Competitive Strategies and Global Management

2011 ◽  
pp. 13-29
Author(s):  
Mingfang Li
Keyword(s):  
Strategic Management ◽  
Future Research ◽  
Extended Model ◽  
Competitive Strategies ◽  
Global Management ◽  
Central Topic ◽  
Michael Porter ◽  
Manufacturing Technologies ◽  
Generic Strategies

Competitive strategies remain a central topic of research in strategic management. Recent conceptual developments and practices reveal possible additional types of competitive strategies due to the advances in information as well as manufacturing technologies. This paper proposes a conceptual extension of the generic strategies originally developed by Michael Porter (1980) to include additional competitive approaches as various combinations and extensions of the original four. Furthermore, this paper applies the extended model of competitive strategies to global strategic management to present a number of propositions. Contributions, limitations and future research are considered.

scholarly journals Competitive Strategies for Wine Cooperatives in the German Wine Industry

2020 ◽  
Vol 9 (2) ◽  
pp. 83-98
Author(s):  
Barbara Richter ◽  
Jon Hanf
Keyword(s):  
Bargaining Power ◽  
Wine Industry ◽  
Market Environment ◽  
Competitive Strategies ◽  
Wine Production ◽  
And Shifts ◽  
External Forces ◽  
The Cost ◽  
Competitive Rivalry ◽  
Focus Strategy

The wine industry is significantly affected by globalization and changes in consumption habits and shifts in lifestyle, which lead to changes in the market environment and intensity of competition in the wine markets. Overall, wine cooperatives have a market share of more than 40 % in Europe. In Germany, they account for around one third of the total wine production. The decreasing number of wine cooperatives and their members leads to the assumption that wine cooperatives have difficulties adapting to the different market environment and though, need to select and implement competitive strategies. The aim of this paper is to identify and develop competitive strategies for wine cooperatives in the German wine industry. Therefore, the external forces affecting competitive rivalry in the wine industry are being evaluated for wine cooperatives in Germany. A qualitative approach has been applied including in-depth interviews with managing directors and chairmen of the board (n=15). Data were transcribed verbatim and content analysed. Results showed that the intensity of rivalry among existing competitors is high. Bargaining power of wine cooperatives towards buyers and suppliers strongly depends on their size. However, generally the bargaining power of retailers is high, although this depends on the retail channel (discounters, food retail, specialized retail, specialized wholesale, gastronomy). Five main strategy dimensions emerged: (1) the cost leadership and cost focus strategy, (2) the differentiation and differentiation focus strategy, (3) collaboration among producers, (4) offering additional services, and (5) options for improved membership relations and increased youth involvement.

scholarly journals STRATEGIES FOR INTERNATIONAL ENTERPRISE COMPETITION

2019 ◽  
pp. 160-171
Author(s):  
Eugeniusz Michalski
Keyword(s):  
Business Strategy ◽  
Technological Development ◽  
Competitive Strategies ◽  
Active Involvement ◽  
Foreign Countries ◽  
Buyer Power ◽  
State And Local ◽  
Governmental Politics ◽  
Competitive Rivalry ◽  
Selection Of

The main aim of this paper is analyzed the role, importance and methodology for creating the strategies for international competition, as well as the ways of implementing and evaluating the selected strategies. This is done by applying exploratory, descriptive and casual methods to outperform competitors and determine the scope of an enterprise’s engagement in international business. The article examines forces and steps of planning, implementing and evaluating a business strategy. Enterprises must recognize and compare the factors that compose foreign environments, especially the state and local governmental politics, legal regulations, economic and financial forces, cultural differences, business ethics, technological development, infrastructure, natural resources protections, sociological and demographic issues. Three competitive strategies have been distinguished: cost leadership, differentiation and focus. Virtues of M. Porter’s five forces model: threat of new entry, competitive rivalry, supplier power, buyer power and threat of substitutes have been considered. The selection of the target markets and recognizing customers preferences belong to the most important tasks of strategic planning. An enterprise can select three levels of international involvement: passive participation, active involvement and taking the international position. Foreign countries impose barriers on international trade, but international agreements facilitate healthy competition.

Pengaruh Hukum terhadap Lima Kekuatan Persaingan Terkait dengan Perumusan Strategi Bersaing Menurut Michael E. Porter

2021 ◽  
Vol 12 (1) ◽  
pp. 51-66
Author(s):  
Nugraha Pranadita ◽  
Ratih Hurriyati ◽  
Puspo Dewi Dirgantari
Keyword(s):  
Competitive Advantage ◽  
Business Performance ◽  
Warning System ◽  
Secondary Data ◽  
Cost Leadership ◽  
Industry Competition ◽  
The One ◽  
Generic Strategies ◽  
Competitive Forces ◽  
Laws And Regulations

There are five competitive forces that influence the Industry. Industry competition affects business performance, so companies must adapt to changing environments to maintain a competitive position. One of the ways to win the competition is to use a strategy. Strategy allows organizations to gain a competitive advantage from three different foundations namely: cost leadership, differentiation and focus. Strategic planning can help to develop an early warning system to avoid threats or develop strategies that can turn threats into profits for the company. Thus the strategy can maximize competitive advantage on the one hand, and can minimize the limitations of competing. The question is; How do laws and regulations affect Porter's five competitive forces and the three generic strategies? This research is a qualitative analytical descriptive study using secondary data, and the unit of analysis is the prevailing laws and regulations in Indonesia. The results of this study; consistently statutory regulations (laws) influence the five competitive forces and three generic strategies put forward by Porter.

scholarly journals The Concept and Importance of Alternative Strategy as Parallel Strategy to be followed in Organizational Decisions to Ensure Success

2018 ◽  
pp. 1-15 ◽  
Author(s):  
P. S. Aithal ◽  
Architha Aithal
Keyword(s):  
Business Processes ◽  
Business Environment ◽  
Alternative Strategy ◽  
Competitive Strategies ◽  
Business Decisions ◽  
Strategy Model ◽  
New Strategy ◽  
Lateral Thinking ◽  
Generic Strategies ◽  
Current Business

Organizations and individuals usually have well defined objectives at any given point of time and invest their resources systematically to fullfill the objectives by setting their goal and formulating and following a strategy to chase their goal. Various strategies are used to chase the goal in both organizational and individual cases include competitive strategies or red ocean strategies, monopoly or blue ocean strategies, sustainability or green ocean strategies, survival or black ocean strategies, and mixed or white ocean strategies. The complexities of business decisions after globalization of business and technification of business processes, winning or sustaining or even surviving in current business is considered as an intensive challenge for organizations and also to individuals. In such environment called the turbulent business or social environment for organizations and individuals respectively, a new strategy for survival called “Alternative Strategy” is proposed in this paper and the concept of the strategy, its importance in the current business environment for organizational decisions are discussed. The paper also looks into the understanding of the Generic strategies, their applicability and constraints while identifying the importance of alternative strategy. Eight postulates are developed to support the concept of alternative strategy, and an alternative strategy model is suggested using lateral thinking techniques. The model consists of evaluating and comparing the alternative strategy with primal strategy using ABCD analysis framework. Such model of alternative strategy can be used at operational level, tactical level, and strategic level of any organization to realize its objectives.

scholarly journals Porter’s Generic Strategies and Performance of Selected Automotive Firms in Nairobi City County, Kenya

2020 ◽  
Vol 2 (2) ◽  
pp. 49-63
Author(s):  
Louisa Kabure ◽  
Mary Ragui
Keyword(s):  
Correlation Coefficient ◽  
Automotive Industry ◽  
Organization Performance ◽  
Sales Growth ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
The Government ◽  
Focus Strategy ◽  
Generic Strategies ◽  
Porter's Generic Strategies

Every firm operating in a dynamic and competitive environment must employ competitive strategies in order to enhance performance and remain relevant to the market. The automotive industry in Kenya has experienced shifts within the last couple of years that have disadvantaged automotive firms’ sales and this despite adequate capacity to supply local demand. Consequently, a persistent decline in volume sales has negatively impacted performance of these firms in overall, reducing competition to price wars that are not a viable option in the long run. This study therefore, sought to investigate the effect of Porter’s generic strategies on performance of selected automotive firms in Nairobi City County, Kenya. The specific objectives of the study were; to determine the effect of cost leadership strategy on the performance of selected automotive firms in Nairobi county, Kenya, to investigate the effect of differentiation strategy on the performance of selected automotive firms in Nairobi county, Kenya and to establish the effect of focus strategy on the performance of selected automotive firms in Nairobi county, Kenya. The scope entailed a study of selected new vehicle firms in the automotive industry in Nairobi County, Kenya. The study was anchored on three theories that included the market based view, the resource based view of the firm and Porter’s diamond theory of national advantage. Descriptive research design was adopted. The study used simple random sampling to attain the sample size and data was collected through drop and pick method using semi structured questionnaires. To ensure reliability in the questionnaire, Cronbach’s alpha correlation coefficient was used where a level of above 0.7 confirmed internal consistency. Pilot testing was done on ten respondents and Pearson’s product correlation coefficient was used to check for correlation between the study variables. A multivariate regression model was used to determine the relative importance of each variable to the study. Data collected was presented in graphs, tables and charts and a conclusion of the study drawn. The study revealed that cost leadership was significant in influencing the organizations’ performance. The study also revealed that differentiation affected their organizations’ performance to a great extent. The study also revealed that the focus strategy improved the sales growth in the firms thereby resulting to overall organization performance. The study concluded that cost leadership was significant in influencing the organizations’ performance. The study also concluded that differentiation affected their organizations’ performance to a great extent. The study also concluded that the focus strategy improved the sales growth in the firms thereby resulting to overall organization performance. The study recommended that the government and other policy makers come up with policies and regulations meant to foster innovation in the automotive industry. Policies should also be put in place meant for the creation of an enabling environment for fair and market driven competition to take place. The study recommended that the management of the automotive firms should often review their pricing structures and be geared towards minimizing their operational costs so as to offer cost friendly vehicles to the clients. The study also recommended that the firms’ management ensure they develop quality vehicles and embrace differentiation strategy so as to remain competitive in the market. The study also recommended that the management fully adopt the focus strategy to help in improving the sales growth in the firms thereby resulting to overall organization performance as well as improving on the product innovation which would lead to improved market share.

Competitive Strategies in Retailing in Emerging Economies

2017 ◽  
pp. 66-89
Author(s):  
Faruk Anıl Konuk
Keyword(s):  
Fair Trade ◽  
Qr Code ◽  
Expiration Date ◽  
Competitive Strategies ◽  
Loyalty Program ◽  
Quick Response Code ◽  
Managerial Implications ◽  
Self Service ◽  
Fierce Competition ◽  
Experiential Retailing

Fierce competition in the retailing sector requires companies to differentiate themselves from competitors. To gain competitive advantage, retailers have started to implement new marketing strategies. The objective of this chapter is to present new competitive strategies in retailing. With this aim, the concepts and strategies of experiential retailing, green retailing, fair trade, customer loyalty program, pop-up store, self-service technologies, expiration date-based pricing, Quick Response Code (QR code) has been discussed along with national and international examples of each kind of strategy. In addition, advantages of each strategy are also covered. At the end of this chapter, some managerial implications and suggestions were discussed based on these new retailing strategies.

Strategisches Management im Mittelstand

2015 ◽  
Vol 56 (2) ◽  
pp. 28-32 ◽  
Author(s):  
Wolfgang Becker ◽  
Patrick Ulrich ◽  
Johannes Krämer
Keyword(s):  
Alternative View ◽  
Wird Eine ◽  
Competitive Strategies ◽  
Strategisches Management ◽  
Cost Leadership ◽  
Integrated Cost ◽  
Scientific Results ◽  
Lock In

Wissenschaftliche Ergebnisse in Bezug auf strategische Themen in kleinen und mittleren Unternehmen (KMU) zeigen gemischte Ergebnisse. Findet in KMU eine Strategiedebatte statt, beschränkt sich diese meist auf Wettbewerbsstrategien. In diesem Beitrag wird eine alternative Ansicht dargestellt. Da die strategischen Spielräume für KMU geringer als die von Großunternehmen sind, wird zur Wahrung eines stabilitätspolitischen Gleichgewichts eine integrierte Kosten- und Leistungsführerschaft vorgeschlagen. Eine Fallstudie wird verwendet, um die Möglichkeiten und Grenzen dieser strategischen Paradigmen zu zeigen. Scientific results regarding strategic topics in SME show mixed results. The discussion concerning strategic aspects in SME emphasizes competitive strategies such as differentiation and cost leadership. In this paper, an alternative view is presented. Integrated cost and quality leadership, based on outpacing strategies, is developed as an alternative strategic view for SME. A case study is used to show possibilities and limits of this strategic paradigm. Keywords: lock in problematik, kundennutzen produktkosten portfolio, handlungsempfehlungen, differenzierungsstrategie

scholarly journals Generic competitive strategies on organizational performance in Nepalese Commercial Banks

Pravaha ◽  
2020 ◽  
Vol 25 (1) ◽  
pp. 87-94
Author(s):  
Jitendra Pd. Upadhyay ◽  
Pitri Raj Adhikari
Keyword(s):  
Organizational Performance ◽  
Commercial Banks ◽  
Core Competency ◽  
Multiple Regression Model ◽  
Competitive Strategies ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
The Impact ◽  
The Relationship

This paper attempts to examine the impact of generic competitive strategy on organizational performance in Nepalese commercial banks. It has employed descriptive and causal comparative research design to estimate the relationship between dependent variable (organizational performance) with independent variables (differentiation strategy, cost leadership strategy, focus strategy, organization’s core competency and bank size). Data has been collected from 384respondents by using structured questionnaire. The multiple regression model has been used to test the relationship. It is found that organizational performance of banks is influenced by cost leadership, differentiation, focus, organization ‘score competency and bank size.

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