Porter's generic strategies

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Michael Porter's generic strategies describe how a company can pursue competitive advantage across its chosen market scope. There are three generic strategies: lower cost, product differentiation, or focus. The focus strategy has two variants, cost focus and differentiation focus, so it is possible to see the concept in terms of four distinct strategies.

A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a higher price. A company also chooses one of two types of scope, either focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments. The generic strategy reflects the choices made regarding both the type of competitive advantage and the scope. The concept was described by Michael Porter in 1980.^[1]