Michael Porter's Generic Strategies

Michael Porter's Generic Strategy refers to adoption of different strategies as per the needs of customers. There are 3 strategies:

1)Cost Leadership Strategy
2)Differentiation Strategy
3)Focus Stretgy

COST LEADERSHIP STRATEGY
Under this strategy companies reduces the cost of there products. Companies adopt this strategy when people are price sensitive i.e they are willing to pay less. They demand 'quantity' rather than 'quality'.
               For adopting this strategy companies have to achieve high efficiency, less overheads, less wasteges and has to control there costs.

Example:
 1) Dell sells its laptops at cheaper prices than other companies.
2) Big Bazar
3) Chineese Phones


DIFFERENTIATION STRATEGY
Under this strategy companies sell there products at higher prices because customers are quality conscious. Only those companies follow this strategy who have unique products, superior service,etc. These type of companies generally spend a lot of money towards Research & Development.

Example:
1) Apple company has the most expensive phones as its phones are superior than others.
2) Patanjali Ghee is expensive than others as it has quality.


FOCUS STRATEGY
Under this strategy companies focus on only a segment of products. They have a narrow market.

Example:
1) Johnson & Johnson company focuses only on baby products.
2) Companies selling Sugar free tablets can only be used by Diabetic patient.