Strategic Management and Business Policies

MBA-B section online class

Assignment: “How technology advancement has been significant
for achiever Michel E Porter Generic Strategies”

Topic Covered on 10th April 2020

SWOC Analysis
SWOC analysis is a strategic planning method used to research
external and internal factors which affect company success and
growth. Firms use SWOC analysis to determine
the strengths, weaknesses, opportunities, and challenges of the
firm, products, and competition.
Strengths:
 Capabilities
 Competitive advantages
 Resources, assets and people
 Experience, Knowledge and data
 Financial reserves, returns
 Marketing, reach
 Innovative aspects
 Location, geographical
 Price, Value and quality
 Processes, Systems, IT and Communication
Weaknesses:
 Lack of capabilities
 Gap in competitive strengths
 Reputation, presence and reach
 Financials Resources
 Continuity, supply chain
 Management cover & Succession
Opportunities:
 Market developments
 Industry or life Style trends
 Innovation and technology development
 Global influences
 Market dimension, Horizontal and Vertical
 Target Markets
 Geographical imports, exports
  Major contract, Tactics and Surprises
 Business/product developments
Challenges:
 Political effects
 Legislative effects
 Environmental effects
 Competitive Intentions
 Market demand
 Innovation in technologies, services and Ideas
 New contracts and partners
 Loss of resources
 Obstacles to be faced
 Poor management strategies
 Economic condition home , Abroad

The Goal of these activates is to offer the customer level of value

that exceeds the cost of the activities, thereby resulting in a profit
margin.
Primary activities:

Inbound Logistics: The receiving and warehousing of raw

materials, and their distribution to manufacturing as they are
required.
Operations: the Process of transforming inputs into finished
products and services.
Out bound logistics: The Warehousing and distributions of
finished goods.
Marketing & Sales: The Identification of customers’ Needs and the
generation of Sales.
Service: The support of customers after the products and services
are sold to them.

Supported Activities:
The infrastructure of the firm: Organizational structure, control
systems, company culture, etc.
Human resource management: Employee recruiting, hiring,
training, development, and compensation.
Technology development: Technologies to support value-creating
activities.
Procurement: Purchasing inputs such as materials, supplies, and
equipment.

Porter's Generic Competitive Strategies:

Michel Porters strongly states that, the fundamental basis of

profitability in the long run is sustainable competitive advantage.
There are two basic types of competitive advantage a firm can
possess: low cost or differentiation. The two basic types of
competitive advantage combined with the scope of activities for
which a firm seeks to achieve them, lead to three generic strategies
for achieving above average performance in an industry: cost
leadership, differentiation, and focus.
Cost Leadership Strategy:
In cost leadership, a Company sets out to become the low cost
producer in its industry. The sources of cost advantage are varied
and depend on the structure of business and Industry. They may
include the pursuit of economies of scale, proprietary technology,
preferential access to raw materials and other factors. A low cost
producer must find and exploit all sources of cost advantage. if a
firm can achieve and sustain overall cost leadership, then it will be
an above average performer in its industry, provided it can
command prices at or near the industry average.

Differentiation Strategy:
In a differentiation strategy a company seeks to be unique in its
business along some dimensions that are widely valued by buyers.
It selects one or more attributes that many buyers in an industry
perceive as important, and uniquely positions itself to meet those
needs. It is rewarded for its uniqueness with a premium price.
Focused Cost Leadership Strategy:
A focused cost leadership strategy needs to compete based on price
to target a niche market. An organization following it may not
charge the lowest prices in the industry. Instead, they may charge
low prices relative to other organizations in the market. Example is
Airways business Economic class and Business or executive class…