• Porter generic model
Porter generic model is one of the most important model frameworks of the business history. This model strategy is recognized as a leading authority on and competitiveness.
Today, Porter generic strategies generate analytical tools used by business schools, managers, and public policy makers. Porter's model is used by health care, non-profit organization strategy, economic development. (Institute for Strategy and Competitiveness, 2008).
Porter's generic strategies are a standard equipment of the manager's toolbox. Porter model are applicable to a large variety of situations and contexts.
Porter's generic business strategies provide a set of methods in order to create a defendable business strategy. They also allow firms that use them successfully to gain a competitive advantage over other firms in the industry. Clearly, porter generic has a real impact on strategy research and practice even today global environment.
But, Despite of is one of the most important toolbox of the business, the generic strategies developed by Porter in 1980 were criticised by many academic and professional authors. Indeed, porter's generic strategies offer some guidance but many operations strategy decisions cannot be made with only the advice offered by Porter. Today, in the result, Porters generic strategies have become just one tool from the manager's toolbox.
The new competitive conditions of the 21st century require a re-formulation of this model.
Porter's ideas became more and more subject of critique under the dynamic change that has occurred within the market in recent time. These changes include globalisation, digitisation (Internet), and de-regulation behalf Downes. Critics point out that economic conditions have changed fundamentally since that time. The rise of the Internet, the technologies and of various e-business applications has strongly influenced nearly all industries. In fact, Porters theories base on the economic situation in the eighties. Behalf Mintzberg, the model cannot explain or analyze today's dynamic changes that have the power to transform whole industries.
Porter generic strategies only give a good starting vision for exploring the topic of cost leadership and differentiation. According to (Lynch, 2003) In the case of growing market the Porter generic analysis couldn't provide an appropriate strategic vision. Today's global environment it is important to use other analyses such as PESTEL analysis. Other useful analyses would include SWOT analysis, analysis of the key success factors strategic group, competence and resource.
Every strategy should base on a careful analysis of all internal and external factors and on their potential future development.
Several authors have commented the application of generic strategies showing the lack of specificity, lack of flexibility of this model and it is limited in today's global environment.
For example, Knights (1992) reported on research in a financial services firm. He found the model difficult to follow in practice because costs of a firm's own operations, let alone competitors, are not calculable, and products are easily imitated.
Pitelis and Taylor (1996) argued that a value for money strategy was becoming a preferred strategy for corporate success despite -or indeed because - it is one of being stuck in the middle. We can conclude that Porter generic strategies for achieving competitive advantage are deficient.
In particular, Miller (1992) questions the notion of being "caught in the middle". He claims that there is a viable middle ground between strategies. Many companies, for example, have entered a market as a niche player and gradually expanded. According to Baden-Fuller and Stopford (1992) the most successful companies are the ones that can resolve what they call "the dilemma of opposites".
A popular post-Porter model was presented by W. Chan Kim and Renée Mauborgne in their 1999 Harvard Business Review article "Creating New Market Space". In this article they described a "value innovation" model in which companies must look outside their present paradigms to find new value propositions. Their approach fundamentally goes against Porter's concept that a firm must focus either on cost leadership or on differentiation. They later went on to publish their ideas in the book Blue Ocean Strategy.
We can conclude that Porter generic strategies for achieving competitive advantage are deficient.
Howeover, one of the main limitations outlined by critics is the obsolescence of the model in the present competitive market conditions, when new sources of competitive advantage are available to companies. That's why we will focus our analysis on the new source of competitive advantage and we will see if these sources are effective or if it just a mere of chimera of marketing management.
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