Generic (industry-unspecific) Bases of Competition

1. Generic(industry-unspecific)Bases of Competition - Michael E. Porter

2. “Generic” StrategiesMichael Porter • How and Where to compete • Ways of competing • Low Cost, Differentiation, Focus • “Where’s” of competing • Variety- , Needs-, Access-based positions

3. “Cost Leadership”way of competing • Striving for lower operating costs (than the competition) • For example, the real Canadian Superstore, Wal*Mart

4. Superstore savings • What are some of the things the real Canadian Superstore may be doing in order to lower its operating costs? • What tradeoffs does it make by so doing?

5. “Differentiation”way of competing • Striving to be different (than the competition) in ways for which the market is willing to pay a premium. • For example, Canada Safeway, Sobey’s

6. Safeway’s / Sobeysdifferentiation • What are some of the things Safeway (and / or Sobey’s) may be doing in order to differentiate themselves in ways for which the customer will pay? • What tradeoffs do they make by so doing?

7. “Stretching the profit”

8. “Focus”way of competing • Consciously limiting the scope of the enterpriseby choice, not by necessity,to achieve a specific excellence (not necessarily defined in relation to competition). • For example, De Luca’s Specialty Foods, La Grotta Mediterranean Market

9. Tradeoffs • Does a Low Cost producer care about differentiation? • Does a Differentiator care about reducing costs? • What is the tradeoff of Focus as a way of competing?

10. “Stuck in the Middle” • What was Eaton’s basis of competition? • Certainly not a cost leader over Wal*Mart • As a department store, not at all focused • Sold food, clothing, electronics, books, furniture, appliances, stationery, etc., etc., etc. • Differentiation from Sears and The Bay not obvious

11. Variety-based positioning“where” of competing • position based primarily on the choice of products to offer • for example, Toys-a-Us • What neat new toys can we source?

12. Needs-based positioning“where” of competing • position based primarily on the choice of customer needs to serve • for example, financial planning service • What financial needs do our customers have?

13. Access-based positioning“where” of Competing • position based primarilyon the choice of means of access to customers • for example, Amazon.com, Mary Kay Cosmetics • We reach our customers in a specific way

14. Generic Strategies • Where to compete? • In what way to compete? • Make choices consistently over time and throughout the organization to build internal and external understanding