With a higher value, consumers will most likely be ready to pay an extra price, giving the firm a competitive advantage over other firms. Porter also identified the focus strategy whereby a firm concentrates on a particular segment in the market whereby it may have an advantage in regard to the cost or differentiation of products (Porter, 1998). This paper presents the application of Porter’s generic strategies in GlaxoSmithKline, which is a pharmaceutical company offering a variety of products for treatment of various diseases. Differentiation strategy is highlighted as the mostly commonly used strategy, although the organization uses the cost leadership strategy.
The differentiation and cost leadership strategies are applied by the organization to maintain its competitiveness. The organization is usually involved in market research to ensure that it satisfies a wide range of consumers with various illnesses such as; asthma, diabetes, cancer and heart problems among many other pharmaceutical products that are essential for severe ailments. The firm also produces vaccines that are essential for protecting healthy people from severe diseases such as hepatitis and tetanus among others. Consumers are also provided with healthcare products that they can readily access from the shops for their day to day uses. These include painkillers such as panadol and hygienic products such as aquafresh tooth paste. Lucozade is also an energy drink that is used globally (Chandon, 2004).
The differentiation strategy of GlaxoSmithKline significantly helps in maintaining profitability in the highly competitive pharmaceutical industry. The firm’s products are of unique quality and consumers attach a high value to them. This is mainly as a result of the perception that the firm possesses the capacity of offering most of the highly needed pharmaceutical products. The highly
They include the Cost leadership strategy whereby a firm lowers its cost of production through identifying cheaper sources of raw materials than competitors,…
Introduction Porter’s Five Forces is considered as one of the most important strategic frameworks in the strategic management to understand and explore the competitive nature of an industry. It also serves as an important tool for any organization to study as to how the different competitive forces may have an impact on it and how it can respond to them.
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