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Mutual Exclusiveness of Generic Strategies - Essay Example
Author : selinagrady
Pages 8 (2008 words)
This critical analysis provides insights into the mutual exclusiveness of cost leadership and differentiation as components of generic strategies. The essay looks at the various justifications why cost leadership and differentiation should not be seen as being mutually exclusive. …
This essay has looked at what is covered under cost leadership and differentiation as the two most important components of generic strategies. The following parts of the essay have looked at why it is possible for firms to implement both cost leadership and deferential generic strategies successfully. The paper has highlighted as a case example the strategic approach employed by Toyota which is an industry leader in automobile industry as a major example of how combining the two strategies is possible. The changes in market environment in areas like demand and supply calls for firms that need to keep up with modern trends to diversify their strategic approaches. Evidence from contingency approach to human resource management has been presented to oppose the mutual exclusive view of generic strategies.
This paper makes a conclusion that the fear that firms employing both strategies simultaneously run the risk of being stuck in the middle, not knowing which of the two to concentrate on, has also been dispelled. Last part has presented a brief analysis detailing why the concepts as detailed by Porter needs further scrutiny. This analysis assists in place Porters ideas in the context of practical business environment as opposed to the theoretical framework under which Porter postulated the two strategies. Therefore, this essay has succeeded in proving that Cost leadership and differentiation generic strategies are not mutually exclusive but are approaches that business organizations can take advantage of to achieve greater margins in terms of their profits. ...