Explain all Porter’s strategies in detail and provide an example of a company for each strategy.

Question: You have studied Porter's three generic strategies. Explain all three strategies in detail and provide an example of a company for each strategy from the following industries:
- Supermarkets
- Soft Drinks

ANSWER:
The Porter's generic framework proposes three strategies that are significant for a company to obtain a competitive advantage. The strategies are cost leadership, differentiation, and focus (Islami et al, 2020, p7(3)). Cost leadership strategy denotes the strategy where an organisation develops the edge so that the sales growth of the competitors can be acquired. It is mainly done by lowering costs while increasing profit. Moreover, the strategy is also applied by enhancing market share while charging a low price. Relating to the differentiation strategy, the management of a business firm tries to make its products attractive and different from the competitors. Intending to apply the strategy, there is a need for extensive research along with ensuring excellent sales growth. The focus strategy is based on concentrating on a specific niche market while gaining detailed knowledge about the market dynamics (Islami et al, 2020, p9(2)). The two types of focus strategy are cost focus and differentiation focus. However, an organisation should understand the unique needs of the customers while implementing the strategy.

The proper implementation of the strategies results in the increased revenue of a company. One of the top soft drinks companies that follow the cost leadership strategy is Coca-Cola. In this regard, the organisation often opts for using cheaper raw materials. Moreover, it has also relied on economies of scale to implement the strategy in an excellent manner. The huge experience of the firm in the operational process has been an advantage in applying the cost leadership strategy. The exquisite global distribution network of the business firm has been vital in this case (The Coca-Cola Company, 2022). Due to implementing the strategy, the company has emerged as the first choice brand for most of the customers around the world. The supermarket chain Tesco follows the differentiation strategy. It has been reflected from the product range of the company. In this case, the company has included various aspects such as online sales, delivery, Clubcard scheme, and others.

While ensuring the strategy, the company has acknowledged the varied needs of the different customer segments. It has been seen in the product portfolio of the company. Tesco has a stocking of more than 90,000 different products. In this regard, it can be said that the company has the capability of creating a huge customer base. Based on the huge product variant, Tesco has witnessed a high number of repeat customers. It has helped the firm to become the leading player in the UK retail sector. At present, Tesco has more than 25% market share despite facing stiff competition from Sainsbury's, Asda, Waitrose, and many others (Tesco.com, 2022). Due to the huge success in the domestic market, the organisation is not aware of expanding outside the UK. It has been seen that Waitrose follows the focus strategy to gain a competitive advantage.

The company mainly acknowledges a differentiation focus strategy for targeting the market while providing a huge range of fresh and quality products. Relating to its differentiation focus strategy, the firm has always done the opposite of what its competitors have done. It has been seen that the company has not offered discounts to the customers. Instead of that, it has valued the promotional means and has offered customer value via a loyalty scheme. The actual reason behind the decent customer base of Waitrose in the United Kingdom is that it has focused on sustainability and conscientiousness. It has added environment-friendly practices and has emphasised the fact that its products are sourced responsibly. The correct implementation of the differentiation focus strategy has been beneficial for Waitrose in achieving more than 5% market share in the UK while competing with some of the leading brands such as Tesco, Asda, Sainsbury's, and many others (Waitrose.com, 2022).

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