Porter's typology for generic business strategy speculates that the differentiation, cost leadership, and focus strategies are the three policies that are individualistic in a specific business. The differentiation strategy looks at developing unique goods and becoming conspicuous in the business. The cost leadership strategy comprises of pricing commodities and cutting costs below the business competitors. Finally, the focus strategy assumes that an organization will find its niche in the market and focus on either on a specific commodity or a market for its commodity (John, 2018). In accordance to his typology for generic business strategy, an organization can make the most out of its performance by either manufacturing different brands or services from other businesses or target to be the bottommost cost manufacturer in the market. Porter’s generic strategies assume that most companies often follow only one of the three corporate level strategies to prosper in their markets. Executives ought to discover how they can distinguish their companies from their competition and use tactics that have low-cost capabilities and an extensive market scope (Raymond, 2003).
For instance, the Southwest Airline is a successful air company because of its low-cost standards as demonstrated by Porter’s typology for genetic business strategy. For the Southwest Company, the low-cost strategy was the best solution for it to maintain its important and economical position in the airline industry, given the competitive nature of the airline business in the modern world with all the incorporation of other superior air company workers. Moreover, with the application of the combination of the differentiation and cost leadership tactic, Southwest Airlines has the best of both tactics given the problems they encountered. Most air company service clients have moderately high anticipation when buying a service because of other air companies’ offering similar services. Also, the clients want to buy different features at relatively low charges. However, Southwest faces threats because of combining both the cost leadership and the differentiation strategy. This is because it makes it challenging for the air company to accomplish basic value chain tasks and support functions while trying to meet this tactical objective.
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Also, by implementing focus strategy, the Southwest Airlines broadly focused on its workers to show a strong commitment to the expansion of their proficiency and the growth of their workers. For instance, the business offers regular worker training, employee free access strategy concerning many enterprises, the promotion of strong business amity and communication, and a focus on supportive work associations ( Raymond, 2003) . These things illustrate a strong commitment to their workers’ development while concentrating on making expertise within whereas retaining reliable staffs rather than looking for new employees which could interrupt the Southwest Airlines’ unique corporation values ( John, 2018) .
Conversely, Miles and Snow presented four strategic types of organizations which include defenders, prospectors, analyzers, and reactors. Their typology assumes that defender organizations maintain a constant share of the market, hence functioning best in stable settings (John, 2014). The prospector organizations depict an atmosphere that is livelier and more susceptible to changes than other businesses within the same market (John, 2018). They also say that the analyzer organizations are a merge of the prospectors and defenders, who have a tendency to mix risks while taking full advantage of opportunities for returns. Lastly, the reactor organizations show an unstable and unpredictable pattern of modification to a shifting environment (Raymond, 2003).
For instance, the Southwest airline seldom needs to make major changes in their methods of operations, technology, and structure, but as an alternative, they focus on improving the effectiveness of their current operations. Just like Porter’s typology, the airline uses this strategy, which includes a partial commodity line, well-designed structure, capital-intensive technology, and cost control, to exploit opportunities for new ventures (Raymond, 2003). The airline tends to be very skilled in production efficiency, marketing, and process engineering.
However, Porter’s typology is similar to miles and Snow’s typology in the sense that it addressed several features of the organizational performance but does not consent to long-term practical mixture strategies (John, 2018). Conversely, Miles and Snow’s typology is more strategic since it places defenders at the end of a continuum and analyzers at the other end. Since reactors are non-necessities, they are eliminated (Raymond, 2003).
References
John, P. (2014). Strategic Management: Theory and Practice. New York: Sage Publications, Ltd.
Print.
John, P. (2018). Strategic Management: Theory and Practice . New York: Sage Publications, Ltd.
Print.
Raymond, E. (2003). Organizational Strategy, Structure, and Process . Chicago: Stanford
University Press. Print
