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Background: Michael Porter identified three generic business strategies: cost leadership, differentiation, and focused strategy. A company with a cost leadership generic business strategy serves a broad market by emphasizing low costs. Businesses with a differentiation strategy enjoy a broad market for their products/services that are different enough from competitive offerings they often command a higher price. A company with a focused strategy concentrates on serving the needs of a narrow, niche market. According to Porter, a company can have only one generic business strategy because an individual business cannot promote low costs while offering high-cost goods or simultaneously target both a broad and a narrow, niche market.
To determine a company’s generic business strategy, the annual report and investor relations presentations on the corporate website are good sources of information. Unlike marketing materials that may exaggerate or make unsubstantiated claims, the Securities and Exchange Commission (SEC) requires annual reports and investor communications to be factual, or else the company could face hefty fines. The annual report is usually found on the investors link at the bottom of the corporate website. There are many investment firms that analyze companies and that can be helpful to your research and analysis, but make sure you cite your sources. In addition to examining investor information, sometimes the company slogan, such as Walmart’s “Everyday low prices,” can indicate the company’s strategy.
Discussion: The purpose of this discussion is to identify the generic business strategy for a company of your choosing. The company you describe on this discussion board will be used for all other assignments in this course.
- Choose an actual (not fictional) company that has not already been selected by another student on the discussion board. Do not use one of the companies in Chapter 1 of the textbook: Walmart, Neiman Marcus, Payless Shoes, Tiffany & Co. Provide a link to the webpage or Facebook page for the company you chose, so other students can find out more about it.
- Report the annual sales revenue (income) for the most recent year for which there is an annual report. If the company is not publicly traded on the U.S. stock market and therefore does not have to issue an annual report, approximate the annual sales for the company.
- Briefly describe these four items related to your company: a) the products/services the company provides to make money; b) the major competitors; c) the types of customers; d) the major suppliers.
- Based upon the description of Porter’s generic strategies in Chapter 1 (cost leadership, differentiation, or focused strategy), choose the one strategy that best fits the way your company distinguishes itself from its competitors in order to better serve customers. Justify why you think a particular generic strategy fits your company.
- Include in-text citations in your posting and provide references in APA format at the end.
After you have made your discussion board posting, ask probing questions of at least two other students so you can better understand the generic business strategy for the company they chose. Make sure you respond to questions raised by other students about your company’s strategy.
Note: The company that you pick for this discussion board will be used for other assignments in this course.