Strategy is a competitive strategy by which a firm
Answers
Answer:Prior to its golden era of the late 20th century, corporate strategy mainly focused on how to maintain monopolies.
From the late 1970s, Michael Porter introduced a number of popular strategy frameworks, most notably his Five Forces Framework and Generic Strategies.
The Generic Strategies state that competitive advantage can be achieved through either cost leadership, differentiation, or a focused mix of the two.
Through his activity positioning framework, Porter prescribed that firms can achieve competitive advantage through three positioning strategies: variety-based, needs-based and access-based.
Variety-based: producing a subset of an entire industry's products or services. Segmenting through the choice of offering, not by customer.
Needs-based: focusing on a certain segment of the industry's customers and aiming to fulfill all of their needs.
Access-based: targeting customers with similar characteristics, but differing routes to access the product/service. Using tailored methods for serving them within the market.
Explanation:The Evolution of Corporate Strategy
Within the realms of the business world, pre-20th-century theories of competitive strategy focused on binary outcomes; mainly how to bludgeon markets with monopolies and exclusivity agreements. As markets became more liberated, compromises and specializations became more important and up to the mid-20th-century teachings moved towards gaining internal proficiency within business analysis.
In the late 1970s, competitive business strategy was brought into the mainstream through the publication of Michael Porter’s Five Forces Framework. Offering a competitor analysis tool to assess markets based upon dynamics of the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and overall industry rivalry. A more in-depth explanation of this method can be read here.
His follow-up was named Competitive Strategy, which introduced the concepts of Generic Strategies. This framework was based on the assertion that in order to maintain above average long term profitability, a firm requires a sustainable competitive advantage. There are two high-level ways that a firm can possess this: through having the lowest costs or via product/service differentiation strategy. A firm must achieve one of those, or the third, a focused specialism of either strategy within targeted markets. If the firm does not focus on one of these, it could stretch itself too thin with contradictory strategy, resulting in it being “stuck in the middle”. The figure below shows a graphical representation of his two seminal strategy frameworks: