According to Michael Porter what are the 3 bases of strategi

According to Michael Porter, what are the 3 bases of strategic positioning? For each, provide an example not found in the paper?

Solution

Strategy is nothing but the plan of action made to meet the overall goal of an organization Strategy provides proper direction to business in meeting the goals. It is important for the firm to decide its strategic positioning. This refers to deciding how a firm should compete and serves the customers in the market. This is done by picking a viable position on the efficiency frontier; configuring its internal operations to support that position and to make sure the firm has the right organizational structure.

Michael Porter has developed theories based on business strategy, economics and other causes and is considered as the Father of Corporate strategy and management.

The three bases of strategic positioning are: -

The advantage of cost strategy is that the products will be available at lower cost which can help in earning more profits. Disadvantage of cost strategy is that the quality of products and services might get compromised.

The advantage of differentiation strategy is that it helps in creating value for the brand and product uniqueness. The disadvantages of differentiation strategy are the products will be costly, requires lots of research work and might affect the profits because of the competitors.

The advantages of focus strategy are that it helps in building great customer loyalty, requires minimal resources and helps in entering the new market easily. The disadvantages of focus strategy are the growth opportunities are very less, the target audience might change and lots of competition.