Analysis Of Porter's Generic Strategy Typology

According to Parnell, Porter’s generic strategy typology consist of a “basic economic assumptions about cost versus differentiation, and the whole notion of focus and market orientation but this strategy has some limitation” (2014). This strategy typology helps to simplify a complex industry by identifying and emphasizing the key strategic factors. These factors are low-cost with focus, low-cost without focus, differentiation without focus and differentiation with focus.

The low-cost with a focus offer a small focus area of the market its product and service at a low cost due to the economies of scale like ALDI. ALDI focuses on “low-cost, its products have a rapid turnover to keep cost down, and it targets low-income consumers “(Parnell, 2014). Whereas the

While, the reactor option yields poor performance due to its lacks consistency. The company that utilizes the reactor option struggle with its purpose of its existence, innovation and direction of the company. The company also want to cut its cost to defend its position within the existing market. Thus, the reactor is not a successful option (Parnell, 2014).

Miles& Snow’s typology emphasize on alignment and consistency. All three options will work for a company, but the key to its success is that the company must be aligned properly, consistent with its action and utilize clear and effective communication (Parnell, 2014).

According to Parnell, large and small businesses “slightly outperform medium size companies” due to the smaller companies having flexibility, segment of the market covered and the company provide great customer service. While larger companies have the advantage of economies of scales (2014). The medium companies are kind-of stuck in the middle of their organizational performance growth (Parnell,