addition , one of the most important models used portfolio matrix of the Boston Consultancy Group .
The Porter and Treacy & Wiersma concepts ( see the boxed text ) both provide three strategies and are indifferent to which strategy you should choose . Their only guideline is that any choice has to be made with dedication . Pursuing two or three strategies at the same time will result in „ middle of the road ‟ offerings .
Porter Competitive Strategy
Porter 5 indicates that there are three successful generic strategies for achieving an above-average profit :
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Supplying a ( standard ) product at the lowest cost , in order to achieve the highest margin in relation to the market price . Porter calls this cost leadership . Supplying a product that deviates from the standard : this renders a direct price comparison impossible . Porter calls this the product differentiation strategy . Supplying a clearly delineated group of customers : the focus strategy . This enables you to meet the specific wishes of the customer group and to align your products and delivery accordingly .
Broad focus
Narrow focus
Lowest costs
Cost leadership
„ Stuck in the middle ‟
Focus strategy
Differentiation
Product differentiation
Figure 7 . Porter ' s generic strategies for competitive advantage
Porter plots this in a spectrum , with the width of the customer focus on the vertical axis , and the choice between low costs and product differentiation on the horizontal axis ( Figure 7 ). He argues that if a business fails to make a clear choice between one of the three options , it will be stuck in the middle . That makes sense , because if no choice has been made for a long while , implementing the options will take a lot of effort . To give a few examples : Ryanair pursues cost leadership , Rolex pursues product differentiation , and with the CL75 Poppy cell phone , BenQ Mobile aims at the trendy female , a typical focus strategy .
Treacy & Wiersema ’ s Discipline of market leaders
In 1995 , Michael Treacy and Fred Wiersema published the book " The discipline of market leaders " 6 , subtitled " Choose your customers , narrow your focus , dominate your market ". The key message in their book is to choose a clear direction for your business , and to subsequently have the discipline to concentrate on just that direction .
Treacy & Wiersema , too , recognised three generic directions for a business to be successful , which are to some extent comparable to those of Porter :
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Operational excellence : supplying a product at the best possible total costs , also taking into account the efforts to be made by a customer . The latter is the addition compared to cost leadership . McDonalds is a good example : certainly not the cheapest supplier of
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