Question

Porter proposes three generic competitive strategies: Cost Leadership Differentiation Focus Comment on which of the three strategies Uber might pursue given its’s current market position, competitive scope, and concerns of growth and sustainability.

Answer 1

Porter has outlined generic business strategies to be implemented to achieve economic profit. The strategies include the reach of a market to a small extent and the extent to which a corporation tries to separate its products. For many firms, the biggest marketing challenge is to find a way to achieve a sustainable competitive advantage over other rival products and companies in the industry. A competitive advantage over competitors is obtained by providing greater value to customers, whether through lower prices or through offering more advantages and services which warrant higher prices.

		COMPARATIVE ADVANTAGES	COMPARATIVE ADVANTAGES
		LOWER COST	DIFFERENTIATION
COMPETITIVE SCOPE	BROAD TARGET	COST LEADERSHIP	DIFFERENTIATION
COMPETITIVE SCOPE	NARROW TARGET	COST FOCUS	DIFFERENTIATION FOCUS

1. Cost Leadership

A company is designed as the low-cost producer in their industry in costs leadership. The sources of cost benefits vary and are dependent on the sector's structure. A low-cost manufacturer must look for and take advantage of all cost streams. If a company is able, at or near the industry average, to achieve and sustain a general management cost, it will be a higher than average performer for its industry.

2. Differentiation

A company is aimed at being unique in its industry in some aspects which are highly valued by buyers. It chooses one or more features, which many buyers in an industry consider important, and places themselves in a unique position to meet these requirements. It is awarded with a high price for its distinctiveness.

3. Focus

The business usually uses focus strategy on specific niche markets to bring innovative low-cost or well-specified goods to the consumer through recognizing the vibrancy of the business and the unique needs of their consumers. When they represent clients exceptionally well in their business, they tend to build strong customer loyalty.

Uber should follow the below step before opting for any Porter Generic strategies:

To conduct a SWOT analysis of your strengths and weaknesses and the prospects and risks you face for each common approach, if that strategy is implemented. Once you have done so, it can be clear that some generic strategies are unlikely to succeed in your organization.