1-Using a current macro event argue how it could be perceived to be an opportunity and a threat in shaping an organisation’s strategy
Introduction
Aim of your answer
Rational of writing about the answer
Structure of answer
Main body
mecro theory 2 issues to discuss
2 example
Conclusion
Summarise make sure to answer question.
550 words
2 references
2-Concisely explain how a firm’s competitive strategy can be aligned to Porter’s Generic Competitive strategies
Aim of your answer
Rational of writing about the answer
Structure of answer
Main body
Strategic
2 issues to discuss
Theory porter’s Generic competitive
( 2 example)
Conclusion
Summarise make sure to answer question.
550 words
2 references
Porter’s Generic Competitive Strategies (ways of competing)
A firm’s relative position within its industry determines whether a firm’s profitability is above or below the industry average. The fundamental
basis of above average profitability in the long run is sustainable competitive advantage. There are two basic types of competitive advantage a
firm can possess: low cost or differentiation. The two basic types of competitive advantage combined with the scope of activities for which a
firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: cost leadership,
differentiation, and focus. The focus strategy has two variants, cost focus and differentiation focus.
1. Cost Leadership
In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the
structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and
other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost
leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.
2. Differentiation
In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one
or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for
its uniqueness with a premium price.
3. Focus
The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of
segments in the industry and tailors its strategy to serving them to the exclusion of others.
The focus strategy has two variants.
(a) In cost focus a firm seeks a cost advantage in its target segment, while in (b) differentiation focus a firm seeks differentiation in its
target segment. Both variants of the focus strategy rest on differences between a focuser’s target segment and other segments in the industry.
The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment
must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation
focus exploits the special needs of buyers in certain segments.
References
• Porter, Michael E., “Competitive Advantage”. 1985, Ch. 1, pp 11-15. The Free Press. New York.
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