Porter's competitive strategy, also known as Porter's generic strategies, is a framework developed by
Michael Porter, a renowned strategist and professor at Harvard Business School. The framework
outlines three generic strategies that a company can adopt to gain a competitive advantage in the
marketplace and achieve long-term profitability.
Cost Leadership: This strategy focuses on achieving the lowest cost of production or service delivery
in the industry while maintaining acceptable quality levels. By being the low-cost provider, a
company can attract price-sensitive customers and potentially drive competitors out of the market.
Cost leadership involves efficient operations, economies of scale, cost control, and often relies on
volume sales.
Differentiation: Differentiation strategy involves creating a unique product or service that is
perceived as superior by customers. The aim is to provide unique features, design, quality, customer
service, or brand image that sets the company apart from competitors. By offering something
distinct, the company can command higher prices and build customer loyalty. Differentiation can be
achieved through innovation, research and development, marketing, or superior customer
experiences.
Focus: The focus strategy involves targeting a specific niche or segment of the market and tailoring
products or services to meet their specific needs. The company concentrates its efforts on a narrow
market scope, such as a particular geographic region, customer group, or product line. By focusing
on a smaller segment, the company can better understand and serve the specialized needs of its
customers, often at a higher price point.
Gap analysis is a systematic process of comparing and evaluating the current state of a system,
organization, project, or process against its desired or ideal state. It involves identifying the gaps or
discrepancies between the current and desired states and determining the steps or measures
necessary to bridge those gaps.
Gap analysis is commonly used in various fields, including business management, project
management, strategic planning, and information technology. It helps organizations assess their
performance, identify areas for improvement, and develop strategies to achieve their goals.
The process typically involves the following steps:
Establishing the desired state: Clearly define the goals, objectives, or standards that the system or
organization aims to achieve.
Assessing the current state: Evaluate the existing processes, systems, performance metrics,
resources, and any other relevant factors related to the desired state.
Identifying the gaps: Compare the current state with the desired state and identify the gaps or
differences between them. These gaps can be related to performance, skills, resources, processes,
technology, or any other relevant aspect.
Analyzing the gaps: Determine the causes and reasons behind the identified gaps. This may involve
analyzing data, conducting interviews, surveys, or other research methods to gain a deeper
understanding of the underlying issues.
Develping an action plan: Once the gaps are identified and analyzed, develop a plan to bridge the
gaps and move from the current state towards the desired state. This plan may include specific
objectives, strategies, timelines, resource allocation, and responsibilities.
Implementing and monitoring: Execute the action plan and monitor the progress regularly. This
involves tracking the implementation of the strategies, measuring performance indicators, and
making necessary adjustments along the way.
