COMM 101 Lecture 5: Porter’s Generic Strategies

• School: UBC
• Department: Commerce
• Course: COMM 101
• Professor: Jeff Kroeker

Document Summary

Porter"s generic strategies: generic strategies (b/c not firm or industry dependent): cost leadership, differentiation, focus. Important to position itself in industry that it operates in can generate superior returns. Porter"s theory suggests that firm"s strengths ultimately fall into 1 of 2 headings: cost advantage, differentiation. Cost leadership strategy: being low-cost producer in an industry for a given lvl of quality. Concentrates on narrow segment & attempts to achieve either a cost advantage/differentiation within that segment. Premise: needs of the group can be better serviced by focusing entirely on it. Firm using focus strategy often enjoys high degree of customer loyalty, entrenched loyalty discourages other firms from competing directly. Firms pursuing focus strategy have lower volumes & therefore less bargaining power w/ their suppliers. Firms that are able to succeed at multiple strategies do so by creating separate business units for each strategy well.