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In: Key Concepts in Marketing

Chapter : Porter's Competitive Strategies

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Porter's Competitive Strategies
Porter's competitive strategies

Porter (1985) suggests four basic competitive strategies: three of these are potentially winning strategies and the fourth is almost invariably a losing strategy:

  • Overall cost leadership. A company that minimises its costs can either reduce its prices or increase its profitability, thus obtaining a competitive advantage over other companies. Minimising costs may be a result of developing efficient systems, it may be a result of negotiating better supply prices, or it may mean moving production to lower-cost countries.
  • Differentiation. Companies that are able to offer products which their customers perceive as significantly different from competing products are able to charge premium prices (provided, ...

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