PORTER’S STRATEGIES

Porter identified three generic strategies a firm

may adopt.
 Overall Cost Leadership Strategy: The
objective is to have a low cost structure
compared with that of competitors.
Differentiation Strategy
Focused Strategy
Formulation of Strategy
 Mission and objectives: Mission is fundamental
unique purpose of an organisation. Objective is
end result which an organisation strives to
achieve.
 Environmental analysis
 Corporate analysis
These two analysis together are known as
SWOT Analysis.
 SWOT Analysis
Strength (S) is an inherent capacity which an firm
can use to gain strategic advantage over its
competitors.
Weakness (W) is an inherent limitation which
creates a strategic disadvantage.
Opportunity (O) is a favourable condition in the
environment.
Threat (T) is an unfavourable condition in the
environment
 TOWS Matrix
Matching the external and internal environment.

Internal S : management, W : same areas

R&D,marketing,fi- as under S
nance,operations

External
Factors
O : economic SO strategy: WO Strategy:
condition,political,s- maxi-maxi (ideal) mini-maxi
ocial changes
T: lack of ST strategy: WT Strategy:
 Business Portfolio Matrix
It was developed by Boston Consulting Group (BCG). It
shows linkages between growth rate and the relative
competitive position or market share.
Growth rate STARS ?

HIGH more profit require investments

CASH COWS DOGS

LOW
well established disposed off

STRONG WEAK Market share

 Formulation of Strategy
 Identification of alternatives: some criteria is set
to evaluate the strategy.
 Choice of alternative
 Implementation