Porters Generic Strategy Essay

IntroductionIt is die that competing for sustainable and superior performance enhances a firms profitability. Equally, this same level of profitability depends by and large on the attractiveness of the industry which is easily measured development the Porters 5 tools and more importantly, the position the firm takes within the industry to leverage on its strengths. To compete properly, a firm must address two fundamental questions. Should it focus on identifying a microcosm of the industry or serve the wide market? According to Michael C. Porter, the porters threesome (3) generic strategies atomic number 18 very important strategies, which fanny be applied to products and function in any industry or organization regardless of its size.The tierce Porters Generic StrategiesIn rear to gain competitive advantage, Michael Porter developed three generic strategies that a participation could single-valued function The Cost Leadership strategy, The Differentiation Strategy and t he Focus Strategy. These strategies grant been used by various organizations to become more competitive in the market. Below is a bureau of these strategies.1. Cost Leadership Strategy This divulgeline is all about minimizing the cost of creating/delivering the firms products or attend tos. It means having the lowest average cost of production compared to relative competitors and still not compromise on quality. There are two chief(prenominal) focusings the scheme can be achieved a. Increasing mesh by reducing costs magic spell charging industry-average prices. b. Increasing its market share by charging lower prices while making profit on each sale through economies of scale While this approach capability be attractive because of its obvious advantages like the entry barriers that result when competitors are not able to parent at the same low level of cost or size of the market share the company gains, there is still the risk of losing the advantage when some other riva l firms begin to cut costs as well(p) by using advancement in applied science to enhance their production capacity.The cost leading strategy is also broad in scope as it sells to different customers in its industry. Firms looking to use this strategy must be able to i. Access the capital needed to invest in freshly technology, which will lead to a larger market share in the long run. ii. Provide go along capital investment to maintain its cost advantage througheconomies of scale. iii. Develop cheaper ways to produce vivacious products and.iv. Maintain a tight control of its overhead costs.2. Differentiation Strategy This strategy allows companies to produce products and services that mop uper unusual attri barelyes that customers can perceive to be better than what the competition offers. It can be seen as a way for firms to compete by creating a totally rising market and dominating it. The supernumerary value the product or services provides to the market allow the firm to charge higher prices (premium) which wherefore compensates the increase in costs used to provide that extra service. The differentiation strategy is achieved by using any combination of the following approachesa. Different design.b. Different brand image.c. Different product or service features.d. Different and more advanced technology.3. Focus Strategy This strategy is a slight variation of the other two generic strategies. However, as the name implies, the focus strategy allows firms to focus on a item niche market and provide queerly low costs (cost focus) or uniquely different products (differentiation focus). Since the strategy is targeted to a select part of the market, it creates a strong incorruptiblety for its brand from its customers, which helps to further reduce the menace of rivalry.Porters Generic Strategies in Action orchard apple tree Inc.Founded on April 1, 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne, orchard apple tree Inc is a multinational corporat ion that designs and leads innovation in the consumer electronics, computer software and personal computers industry. Apple Inc. traditionally focused on personal computers but later shifted its focus to consumer electronics. It now has a mold of high-end products including the Macintosh line of computers, iPod, iPhone, and the iPad. They are also involved in developing innovative operating systems and browser. Its main competitors are Microsoft, Samsung, HP, Blackberry, Acer, Toshiba,Nokia and Dell. Apple Inc. leads the competition by implementing a Differentiation Strategy. Apple Inc. sets itself apart from its competitors by providing unique features for its products, which the customers really cannot get anywhere else.These unique features include design, functionality, durability and consistency. Also, Apple electronic products are know to be sleek, simple and minimalist. Its MacBook and iMac products have a reputation for long battery life and completely zero tolerance for vi ruses, which are known to plague other competitors products that run both Windows or Linus operating systems. Another aspect of differentiation that Apple utilizes well is its amazing customer service. through with(predicate) its Apple Stores worldwide, Apple creates a very interactive forum where customers can come to purchase new devices or fix faulty ones. These unique aspects of its differentiation strategy are what give Apple the right on to charge higher prices, thereby commanding a premium for their services. This strategy has proven to work well for the company because its market share has constantly been increasing since it released the iPod in 2005. The following diagram illustrates Apple incs strategic position relative to two of its competitors in the mobile industryApple inc. implements a matter of strategies that makes it different from its competitors. It is more focused on meeting the customers needs than anything else, so they didnt need to compete on price, and could set their own prices, because they were delivering something much more valuable to the consumer. The following are some of Steve Jobs quotes that reflect Apple Incs focus on the differentiation strategy If it could save a persons life, could you find a way to save ten seconds off the boot time? Youve got to start with the customer experience and work back towards not the other way around. Being the richest man in the cemetery doesnt matter to me.Going to bed at night, formula weve done something wonderful thats what matters to me. One of Apple Incs business strategies is to release few but highly anticipated high-end products while others like Samsung focused on releasing a wide soma of products to the market. Apple Inc. allows for long development cycles that grow anticipation and showcased new innovations with each new release low Steve Jobs whose strategy was develop and sell brand new, innovative products which blended art andtechnology in order to provide a simple and streamlined user experience. After its initial release of the iPod and iPhone, Apple Inc. keep to innovate in the mobile device market through smartphones and then tablets which began to create a loyal customer base around their brand.ConclusionSince inception, Apple Inc carved its own market by creating unique products that targeted a specific market. The company continuously innovates to produce the best products in the market and strategically rolls them out so that its customers appreciate it even more. The following are its production and marketing emphasis Production emphasis Nobody does it betterMarketing Emphasis Ours is better than theirsApple Inc. focused on making technology more artistic with design features that catch the eyes of the customer. The efficiency of its products also makes customers want to pay a higher price. The company differentiated itself and its products from the competition and ensured that its loyal customers were always satisfied.ReferencesChris Nosal. Apples Marketing Strategy Sell On Value, Not Price. Web. 25 Mar. 2014. http//www.chrisnosal.com/apples-marketing-strategy-sell-products-on-value-not-price/ Dan Mcgaw. 7 Key Strategies That You Must Learn From Apples Marketing. Web. 28 Mar. 2014. http//blog.kissmetrics.com/7-strategies-apple-marketing/ Fion McCormack. Apples IPhone Marketing Strategy Exposed. Yahoo Small Business Advisor. Web. 20 Mar. 2014. Grobart, Sam. Apple Chiefs Discuss Strategy, Market Share-and the New IPhones. Bloomberg Business Week. Web. 23 Mar. 2014. http//www.businessweek.com/articles/2013-09-19/cook-ive-and-federighi-on-the-new-iphone-and-apples-once-and-future-strategy Jerry Alison. Business Strategy The Three Generic Strategies. HubPages. Web. 30 Mar. 2014.