According to Porter, although external changes can pose a threat to a company’s strategy, a greater threat to strategy often comes from within the company. Many managers and leaders and organizations think that they are trying to be the best organization in their industry. And this leadership is usually achieved through economies of scale, technology, or maybe from unique access to raw materials. He believes that a company must choose a clear course in order to be able to beat the competition. Michael Porter uses 4 strategies that an organisation can choose from. The Michael Porter’s Five forces analysis framework is used to analyse an industry and more specifically, the external business environment of the industry. Most industries only have one cost leader. Notes: he is an aerospace engineer; every project is embedded in a strategy if we don’t understand that strategy then we can’t decide we got the right project; thus we need to get alignment; Differentiation. In the Michael Porter’s Generic strategies, three main strategies are used as the base namely, Cost leadership, Differentiation leadership and Focus. Porter originally emphasized that a company should target only one of the strategies in the framework or risk paying a “straddling penalty” (a la the doomed airline offshoot Continental Lite ). This five forces framework tells us whether or not we should enter an industry, and also if we enter it, then what can be … Michael Porter: Aligning Strategy & Project Management. Michael Porter’s Five forces model for industry analysis. The four strategies to choose from are: Cost Leadership strategy. These are shown in figure 1 below. The Generic Strategies can be used to determine the direction (strategy) of your organisation. Porter’s strategy frameworks have suffered some ambivalence over the years in academic circles — yet they have proved wildly compelling among business leaders around the world. At a fundamental level, all strategies for Porter boil down to two very broad options: Do what everyone else is doing (but spend less money doing it), or do something no one else can do. Michael Porter’s Generic strategies is a tool that can be used for identifying the direction of the organization. Porter has advised management in numerous U.S. and international companies and governments worldwide and has won many honors and awards for his work in economics and strategic management theory. He then subdivided the Focus strategy into two parts: "Cost Focus" and "Differentiation Focus." He is a Professor at Harvard Business School, and he was one of the founders of the consulting firm The Monitor Group (now part of Deloitte) and FSG, a social impact consultancy. February 3, 2020 By Hitesh Bhasin Tagged With: Strategic Marketing Articles. Porter later softened his stance in this regard recognizing the benefits of a hybrid approach in some cases. Porter or Mintzberg - Whose View of Strategy is the most Relevant Today? Michael Eugene Porter (born May 23, 1947) is an American academic known for his theories on economics, business strategy, and social causes. “Strategy is the big picture of how the organization is going to win in its environment, whatever that is.” “Strategy is not competing to be the best. Michael Porter is one of the foremost leaders on strategy. There are two people, and only two, whose ideas must be taught to every MBA in the world: Michael Porter … Michael Porter is indisputably one of the most influential thinkers on management and competitiveness in the world. This page shares his wisdom on the subject. Porter called the generic strategies "Cost Leadership" (no frills), "Differentiation" (creating uniquely desirable products and services) and "Focus" (offering a specialized service in a niche market). 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