Weaknesses of Porter's Three Basic Types of Competitive Advantage
Mouillot (2013) argues that although Porter's three basic types of Competitive Advantage are very useful with regard to research for competitive advantage, there are some limitations or disadvantages:
1. Missing Ethical Guidelines for Sustainability
: People have become increasingly aware of the importance of sustainable development. In order to stay competitive in the current global environment, it is no longer enough to follow low-cost strategies. Rather, also sustainable issues and its subsequent ethics need to be considered. Therefore, the fact that Porter’s Competitive Advantage Types do not include any type of ethical guideline makes the framework less useful nowadays.
2. Mix of Portfolio and Positioning Strategy
: Porter’s “Focus” is a portfolio strategy while the other basic types of Competitive Advantage have more to do with positioning. A company can follow both a cost-domination and differentiation strategy while being concentrated at the same time (Cost Focus or Differentiation Focus). The fact that these different types of Competitive Advantage are developed out of different perspectives can be very confusing, especially when searching for effective ways to achieve competitive advantages.
3. Little Specific Guidance
: Mouillot concludes that Porter’s three types of Competitive Advantage remain important for firms in deciding on their competitive advantage. However, the framework does not help organizations to find out in what way or with what specific strategy these competitive advantages can be achieved.
Does anyone know additional limitations or disadvantages? Please react...
Source: Mouillot, P. (2013) “Asymptotic Effect in Cost Domination: The Way to Differentiation” Journal of Strategic Marketing Vol. 21 Iss. 6 pp. 529-540