Porter's generic strategies

<p>Michael Porter's generic strategies describe how a company can pursue <a href="/facts/Competitive_advantage/5q4oKvzW">competitive advantage</a> across its chosen market scope. There are three generic strategies: lower cost, <a href="/facts/Product_differentiation/BGeUHFCL">product differentiation</a>, or focus. The focus strategy has two variants, cost focus and differentiation focus, so it is possible to see the concept in terms of four distinct strategies.
</p><p>A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a higher price. A company also chooses one of two types of scope, either focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments. The generic strategy reflects the choices made regarding both the type of competitive advantage and the scope. The concept was described by <a href="/facts/Michael_Porter/Efbku8s6">Michael Porter</a> in 1980.
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Porter's generic strategies open-in-new

Porter's generic strategies