Porter generic strategies
Porter's generic strategies are ways that businesses can compete with each other. Imagine you and your friends are all trying to collect the most seashells at the beach. You can either try to collect a lot of shells (make a lot of sales), or you can try to collect the most unique and special shells (make unique products that not everyone else sells).
Now, let's say there are a lot of other people at the beach trying to collect seashells too. You need to come up with a way to be better than everyone else. That's what Porter's generic strategies are for.
The first strategy is called "cost leadership." This means you try to make your seashells cheaper than everyone else's, even if it means you don't have the most special shells. You might make your shells with less expensive materials, or you might find a way to make them faster so you can make more and sell them for less money.
The second strategy is called "differentiation." This means you try to make your seashells special and different from everyone else's, even if they cost more. You might use extra special materials or colors, or you might be the only one selling seashells that have a little toy inside.
The third strategy is called "focus." This means you focus on selling to a specific group of people, like only selling seashells to kids instead of adults. By focusing on one group, you can make your seashells perfect for them and beat everyone else who is trying to sell to everyone.
So, those are the three ways businesses can compete with each other - cost leadership, differentiation, and focus. Just like how you can try to win the race for seashells by collecting a lot, collecting special ones, or focusing on a specific type of shell.
Now, let's say there are a lot of other people at the beach trying to collect seashells too. You need to come up with a way to be better than everyone else. That's what Porter's generic strategies are for.
The first strategy is called "cost leadership." This means you try to make your seashells cheaper than everyone else's, even if it means you don't have the most special shells. You might make your shells with less expensive materials, or you might find a way to make them faster so you can make more and sell them for less money.
The second strategy is called "differentiation." This means you try to make your seashells special and different from everyone else's, even if they cost more. You might use extra special materials or colors, or you might be the only one selling seashells that have a little toy inside.
The third strategy is called "focus." This means you focus on selling to a specific group of people, like only selling seashells to kids instead of adults. By focusing on one group, you can make your seashells perfect for them and beat everyone else who is trying to sell to everyone.
So, those are the three ways businesses can compete with each other - cost leadership, differentiation, and focus. Just like how you can try to win the race for seashells by collecting a lot, collecting special ones, or focusing on a specific type of shell.