Generic Strategy

Abstract

The concept of generic strategy was first defined by Michael Porterin his book Competitive Advantage (1985). A strategy of cost leadership involves seeking the lowest cost structure in the industry; a strategy of differentiation is based on providing a product/service offering that is unique and has higher than average value in the marketplace; and a focus strategy targets a specific segment within an industry. The primary intention is to serve this segment in an exemplary fashion; in so doing the firm may achieve a low-cost advantage, a differentiation advantage or (rarely) both.