The sources of cost advantage are varied and depend on the structure of the industry. Even if the quality did not suffer, the firm would risk projecting a confusing image.
The focus strategy has two variants. Generic Strategies and Industry Forces Industry. Several theories recommend creation of a competitive advantage, such as resource based value and resource-advantage theory among others.
Product development requires that the company must offer attractive products to grow its market share and performance. Having done this, it may be clear that your organization is unlikely to be able to make a success of some of the generic strategies.
There have been cases in which high quality producers faithfully followed a single strategy and then suffered greatly when another firm entered the market with a lower-quality product that better met the overall needs of the customers.
High level of expertise in manufacturing process engineering. In addition, the company must ensure that it keeps expanding its market reach.
Focus is not normally enough on its own. A focus strategy works well for small but aggressive businesses. Market penetration and market development are second and third in priority, respectively.
But whether you use Cost Focus or Differentiation Focus, the key to making Samsung three generic strategies success of a generic Focus strategy is to ensure that you are adding something extra as a result of serving only that market niche.
Through the broad differentiation generic strategy, Apple stands out in the market. But combinations like cost leadership with product differentiation were seen as hard but not impossible to implement due to the potential for conflict between cost minimization and the additional cost of value-added differentiation.
Differentiation In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers.
At the beginning low-cost budget airlines chose "cost focused" strategies but later when the market grow, big airlines started to offer the same low-cost attributes, and so cost focus became cost leadership.
An organization can gain competitive advantage over its rivals by offering consumers greater value than its rivals, such as by offering lower prices, better services or other unique features that a competitor may not be able to match.
Through the broad differentiation generic strategy, Apple stands out in the market. Overheads are kept low by paying low wages, locating premises in low rent areas, establishing a cost-conscious culture, etc. For example, the company continues to innovate through products like iPhone, iPad, and Apple Watch.
Sometimes, businesses look for a combination strategy to please customers looking for multiple factors such as quality, style, convenience and price.
Each generic strategy has its risks, including the low-cost strategy. A company either sells its goods at average industry prices to earn higher profits than its competitors or it sells at below-industry prices, trying to profit by gaining the market share.
Market penetration and market development are second and third in priority, respectively. Instead, they claim a best cost strategy is preferred.
Focus The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. Tablets could be restricted to 5, 7 and 10 inches. Promotional strategy often involves trying to make a virtue out of low cost product features.
A focus strategy works well for small but aggressive businesses. This intensive growth strategy is similar to market penetration, but market development focuses on establishing presence in new markets. In this way, the generic strategy of broad differentiation supports the company in maintaining its leadership and position as a high-end and high-value business.
Meanwhile, smaller airlines try to make the most of their detailed knowledge of just a few routes to provide better or cheaper services than their larger, international rivals.
One successful way of doing this is by adopting the Japanese Kaizen philosophy of "continuous improvement. You therefore need to be confident that you can achieve and maintain the number one position before choosing the Cost Leadership route.
Some risks of focus strategies include imitation and changes in the target segments. For example, since iOS has received five major version upgrades in five years, compared to eight for Android in less than four years Apple; Google.
Porter's Generic Strategies If the primary determinant of a firm's profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. Samsung has always been under accusation of copying iPhone, which got them into trouble by losing a highprofile case to Apple Inc.
- for imitating Apples design. Samsung is a diverse business with chips, displays, and other technology. This pays dividends, allowing it to compete on price and increasingly, offer features Apple hasn't gotten to. Extending Porter’s generic strategies 1 Introduction Is there a generic recipe for a successful business?
In reality, the best strategy is probably. Apple’s generic strategy, based on Porter’s model, aligns with the company’s intensive growth strategies. In particular, the intensive growth strategy of product development is key to fulfilling this generic strategy and supporting Apple’s success.
Samsung 's Business-Level Strategies As taught in class, different generic strategies on the business level can lead to competitive advantage in the same industry.
Samsung uses a mixed strategy of cost leadership and differentiation as well.Samsung three generic strategies