Nadalogia

Competitive Strategy
The Basics a la Michael Porter
© Fred Nickols 2000
In his book, Competitive Strategy (Free Press: 1980), Michael Porter identifies three fundamental competitive strategiesand lays out the required skills and resources, organizational elements and risks associated with each strategy. The table below is a shorthand way of referring to what Porter has to say.
|CompetitiveStrategy |Required Skills & Resources |Organizational Elements |Associated Risks |
|Overall Cost Leadership |Sustained capitalinvestment and access|Tight cost control |Technological change that nullifies |
| |to capital |Frequent, detailed reports|past investments or learning |
| |Process engineering skills |Structured organization and |Low-cost learning by industrynewcomers|
| |Intensive supervision of labor |responsibilities |or followers through imitation, or |
| |Productsdesigned for ease of |Incentives based on meeting strict |through their ability to invest in |
| |manufacture |quantitativetargets |state-of-the-art facilities |
| |Low-cost distribution system | |Inability to seerequired product or |
| | | |marketing change because of the |
|| | |attention placed on cost |
| | |...