You have been appointed as a Strategy Consultant to an Italian Luxury Sports Car
manufacturing brand namely “Pagani Huayra” wanting to enter India. Which one of
Porter’s Generic Strategies would you choose to be operational in India & explain the
reasons in detail behind your choice of strategy? Once the strategy has been chosen explain the categories of customers you would target alongwith the price point
Answers
Answer:
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Explanation:
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Answer:
Explanation:
guess the question is regarding Porter’s Generic Strategies. And, I would stick to the brief!
I would not dwell elaborately upon the Porter’s Grid of generic strategies as I suppose the enquirer has the thorough knowledge of the same. Porter essentially talks about 3 generic strategies - (1) Cost/Price Leadership, (2) Product Differentiation, and (3) Focus.
Cost/Price Leadership refers to reducing manufacturing costs, and passing on the savings to the customers by offering the product at a lower price than the competition. Cost Leadership - lowest cost of production - can be achieved through operational excellence, optimizing the scale of operations to maximize returns to scale, or technological leadership.
Product Differentiation refers to building sustained brand equity into your products. The competition is about a differentiated product offering compared to the competition.
A closer scrutiny of these generic strategies reveals that the Cost/Price Leadership is ideally suited for a market structure with features close to those of Perfect Competition, where the product is a commodity - a product offering that cannot be differentiated from one seller to another. Therefore, the lower the cost of production, the lower is your price and higher is the demand for your product. This strategy can be deployed for commodities, commodity-like products, bulk products, industrial products.
Whereas the Product Differentiation strategy is ideally suited for Monopolistic competition, a market situation in which there may be many independent buyers and many independent sellers but competition is imperfect because of product differentiation, geographical fragmentation of the market, or some similar condition. This is the strategy deployed by the marketers of the Fast Moving Consumer Goods [FMCG]. These are the people who build ever-lasting brands based on Product Differentiation. Some of the very best of this lot include the Unilever Group, Procter & Gamble, ITC and so on.
Porter’s 3rd Generic Strategy, Focus, is all about targeting the right customer segment and offering products that meet and satisfy the specific needs of the targeted segment. This strategy is deployed along with one of the other two generic strategies - we can have Focus+Cost/Price Leadership, and Focus+Product Differentiation - resulting in 4 generic strategies in all.
From this discussion of Porter’s Generic Strategies, it is obvious that as a marketer of Swiss luxury watches, one should adopt Focus+Product Differentiation to enter the Indian market. Focus on a specific customer segment based on your demographic/psychographic segmentation, and offer a differentiated product compared to the competition.