Table of Contents
Three generic strategies is a framework for defining a strategy based on deciding between competing in a broad context or a narrow one, and then doing so via a low cost or a differentiation approach. It can be used as guidelines or as a logical point of departure for strategy development.
Methodology
- Define where to compete. Define the key segments of the market. Determine how well the company is positioned relative to its competitors. Choose between a head-on approach and one that avoids competition.
- Define how to compete. Study the value chain. Determine capabilities relative to competition in terms of cost or offering.
- Choose and act on a strategy. Choose among the three generic strategies or tailor a specific strategy to the company that uses a combination of the generic strategies.
Notes
- Should be used in terms of structuring thinking about strategy at a very high level—not at a specific level
Strengths
- Useful point of departure for further strategy development
Weaknesses
- Highly generic and vague in nature