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Generic strategies and How Watawala Plantation uses Generic strategies


Generic strategies and How Watawala Plantation uses Generic strategies

Word Counts 4784


Table of Contents

Executive summary

Part 01

1.0 Generic strategies

1.1 Cost leadership

1.2 Differentiation strategy

1.3 Focus strategy

1.4 Variety based positioning

1.5  Needed based positioning

1.6 Access based positioning

1.7 Critiques and supports on the Porter’s generic strategies

1.8 How generic strategies fit for today with other concepts of strategic management

Part 2

2.0 Watawala Tea Ceylon Limited

2.1 Differentiation strategy

2.2Cost leadership strategy

2.3 Focus strategy


Additional information


Executive summary.

Strategic management can be viewed as a widely popular topic among many authors and they have come up with a number of concepts and theories to explain different applications within the discipline. Michael Porter is one of the famous management gurus and may be most cited author in management field. In 1980, he introduced generic strategies in his book called “competitive strategy”. Then different authors argued and introduced several modifications to these theories and even today these strategies are widely discussed and practiced. The main objective of this study is to critically evaluate the generic strategies. Initially, this study intends to define the generic strategies. Generic strategies have been changed overtime. Firstly, Porter introduced three strategies called cost leadership, differentiation and focus. Latter, he divided focus strategy as cost focus and differentiation focus. Further, he introduced three positioning strategies which support to gain competitive advantage. Therefore, this study discusses how generic strategies are introduced and how these have changed overtime. Throughout these decades, many authors have been arguing about the Porter’s generic strategies. Therefore, this study intends to discuss arguments against and support the generic strategies. Thus, new adaptation of generic strategies such as hybrid strategy and the best cost strategy also have been discussed here. Further, this study explains how generic strategies fit for today’s business environment with other modern concepts of strategic management. On the other hand, it further discusses how generic strategies are relevant or not for today’s business challenges and increased market competitiveness. Second part of this study discusses the practical aspects of the generic strategies. This phase of the report discusses the practical applications of generic strategies with respect to a company and how the company has used the model in finding solutions for their business challenges. Watawala tea Ceylon limited which is one of the famous plantation companies of Sri Lanka is used to analyze the strategic application. Company has different product range which follows different generic strategies. Secondary data such as journal articles and subjected related books have been referred to conduct this study.

Part 01

Generic strategies.

Generic strategies refer the base which a firm uses to achieve its desired position within its business environment. According to Michael Porter, there are three generic strategies that companies can follow to achieve the sustainable competitive advantage.
• Cost leadership strategy
• Differentiation strategy
• Focus strategy.

Cost leadership strategy – A company that finds and exploits all kinds of cost benefits and target to becoming the lowest cost producer in the industry pursues a sustainable cost leadership strategy.
Differentiation strategy- A company that try to be unique in the particular industry with some dimensions of its product or services to add more value to customers.
Focus strategy – This strategy focus on narrow competitive focus. A company selects a narrow segment in the industry and adapt company strategy to serve that narrow customer segment.
Porter developed this theory in 1980 and he firstly introduce above three generic strategies. These three strategy have been further explained below.

Cost leadership

Cost leadership strategy highlight on operation efficiency mainly focusing on economic of scale. Firms which follow this strategy normally produce large volume of standardize products and it allow company to get advantage of economic of scale and effect of learning curve (Diasz, 2017). That is the reason that most of the companies follow cost leadership strategy aim broader customer segments. The firms mostly offer a product with basic requirements to large customer base. Further, firms continuously explore cost reduction tactics in every part of the value chain. Walmart is one of famous company that follow cost leadership strategy.