Bacha log, let’s see Michael Porter’s Generic Strategies. Right, now he suggests as Generic
Strategies the reason being he is giving us three strategies under it. According to Porter,
strategies allow organisation to gain competitive advantage from three different bases cost
leadership, differentiation and focus. Porter calls these base, Generic Strategies.
Now cost leadership emphasizes producing standardized products at a very low per unit
cost for consumers who are price-sensitive. Example, Hamara Bajaj, two wheelers.
Remember, bacha log. They follow cost leadership, try to minimize cost of production.
Differentiation is a strategy aimed at producing products and services considering unique
industry wide and directed at consumers who are relatively price insensitive, does not
matter what the price tag is. Here you can say Honda Motors, right, they manufacture
according to their quality. They don’t take care or they don’t feel that we need to take care
of the pricing, right. Unlike your cost leadership emphasise, remember. Focus means
producing products and services that fulfil the needs of small groups of consumers, we call it
as Niche Market, right, a particular small segment. So here you can say Ducati, right, two
wheelers they manufacture only and only Ducati Motorcycles, right, for niche segment, for
small group of consumers. Larger firms with greater access to resources typically compete
on a cost leadership and or differentiation basis, whereas smaller firms often compete on a
focus basis. They have a target market.
Porter stresses the need for strategists to perform cost benefit analysis to evaluate sharing
opportunities among a firm’s existing and potential business units. Porter stresses the need
for firms to transfer skills and expertise among business units effectively in order to gain
competitive advantage.
Cost leadership strategies, right, bacha log, now this strategy is followed by Bajaj
Motorcycles, right. They give us very much cheap or you can call it as