All about Competitive Advantage
Join now. Completely free.
Log in
|
Weaknesses of Porter's Three Basic Types of Competitive Advantage
Anneke Zwart, Student (University), Netherlands, Moderator
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
|
|
| |
|
On Weakness #3 of Porter's Three Basic Types of Competitive Advantage
Prasad Chundi, Consultant, India, Member
On "Little Specific Guidance" - The methodology for achieving class-leading position following the chosen strategy will always be company-specific in view of the numerous factors that need to be considered. Case studies can bring out these better than generic guidelines.
|
|
| |
|
Tactics to Address Weaknesses of Porter's Three Basic Types of Competitive Advantage
Andre van Niekerk, Director, South Africa, Member
I think Porter's models are often used/critiqued out of context. I find it useful to think of the three generic strategies as very specific choices for achieving superior returns in a specific industry. The "tactics" required for the successful execution of the chosen generic strategy requires a different approach, such as RBV (Resource Based View), that allows far greater scope in terms of formulation, innovation and execution. Here is a useful article:
Obasi Akan Richard S. Allen Marilyn M. Helms Samuel A. Spralls III, (2006),"Critical tactics for implementing Porter's generic strategies", Journal of Business Strategy, Vol. 27 Iss 1 pp. 43 - 53.
|
|
| |
|
Little Specific Guidance
Prasad Chundi, Consultant, India, Member
@ Andre van Niekerk: Thank you for your response. I am an admirer of Porter and used his generic strategies more than once successfully. I agree with your view that the tactics to implement the chosen generic strategy require different approaches. That is what I meant, but you expressed it better. Thanks for recommending the article. Best regards.
|
|
|
