Analysis Of Porter's Competitive Strategy

Making profitability is the main purpose of setting up a business. However, an important person in a firm or a company must think the best methods in order to make their business successful and obtain profit as well. Kroenko and Hooper (2013) discussed in their book that it is highly recommended for all companies to investigate their structure by using Porter’s five forces model before they want to plan a good tactics. This is because organisations could plan and create the best steps to achieve success after they know their businesses’ strength, weaknesses, threats and possibilities. Therefore, this will look further on competitive plans that can be applied by all firms which directly could gain advantages and some method can be done in …show more content…
Based on Figure 1, the four approaches can be summarised into two categories which are leadership of the business and target scope. There are two types of leadership of business which are cost leadership and differentiation leadership. To clarify, a firm aims to be the lowest-cost producer in the industry within cost leadership whereas within differentiation leadership, a company targets to make their products or services unique or different from other companies. Besides, broad market and narrow market are the two scopes that need to be choose by firms. This means they need to choose their scope of customer base whether whole industry or an industry segment. For example, a big restaurant may target all Malaysians (whole industry) whereas the targeted customer for school canteen are students, teachers and staff of that particular school only (narrow …show more content…
However, it is difficult for an organisation to sustain their economic benefits as rivals might copy firms’ tactics like Amir’s business. Luckily, it is stated by the two authors, Kroenko and Hooper (2013), there are several ways that can be done by any organisations to hold up competitive pros using products or services and business processes. One example for the hypermarket to sustain good advantages via products are this shop provides high-quality products and have trained and skilled workers. Next, this shop should have a customer service department so that they could solve all problems faced by customers efficiently in a short time. Also, this supermarket could create ‘Click n Go’ service and delivery service in order to differentiate its services from rivals. Delivery service is just like the normal online shopping which the store sends items to the buyers’ houses after they have purchased online. Meanwhile, ‘Click n Go’ service is a service which buyers can choose items that they want online in the store’s website before shopping then, they’ll just drive to ‘Click n Go’ counter which is located beside of the store and they only pay and collect the items that they have chosen online. These two services make buyers’ shopping activity easier and faster thus lead to attract more