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Porter's three generic strategies

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I learned about Porter's three generic strategies: Poter's value chain analysis, procurment process and inventory management. If I choose an industry such as grocery stores, clothing retailers or airlines, etc, can you assist me with analyzing and comparing two companies, one that is competing based on price and another that is pursuing a differentiated strategy enabled by the creative use of IS. Can you share an example of ways that the company use IT to help it differentiate and compete against the low cost provider? If possible, can you provide reference?

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The response provides you a structured explanation of strategy selection and implementation. It also gives you the relevant references.

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We choose the first industry suggested by you. The grocery stores,/clothing/retailer. The first company we select must be competing on price. This company is Wal-Mart. It is competing on price. It has been able to achieve cost leadership by taking a number of steps. First, it has been able to reduce its operational costs to very low levels. For example it has been able to run its stores using very low labor costs. Second, it has been able to achieve high asset turnover. This means it has been able to achieve very large volumes of sales. Third, it has been able to achieve considerable control over its suppliers. Because of bulk buying it has been able to get economies of scale in purchasing, and in logistics. These factors have contributed to give Wal-Mart cost leadership.

We now consider a company that is pursuing a ...

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  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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