Digging deeper into Porter's Generic Strategies u5s3p39

Sandberg(1996) claimed the model does not allow segment differentiation, meaning it didn't account for organisations that attempted different approaches in the different segments in which they operate.

Generally speaking, Mintzberg (1995) claimed 6 ways of strategic differentiation, which you might expect to mix or combine together.

• price
• image
• support
• design
• quality
• undifferentiated (or non-differentiated).

Price and image are often combined, particularly with designer brands which desire to be perceived as expensive (or cheap!) Price may be part of the image.

Mintzberg also proposed breaking down the broad/narrow market continuum into finer granularity

• unsegmented
• segmented
• niche
• customised

Can draw a matrix based on four market definitions and six strategies. A customised market strategy is likely to demand a high level of customer-support differentiation.

Generic strategies are strategies for growth. Not all strategies realise their intended objectives, and sometimes satisficing is sufficient (u5s3p44).

Where strategies fail, what can you do?

Slatter (1984) u5s3p45 suggests turnaround is possible and divesting of the struggling part of your business is not the only way to achieve this.

Sometimes companies are so successful at turnaround that they go on to outperform the market. Gringyer (1988) calls these companies "sharpbenders". Sharpbenders usually occur where the strategy includes
major changes in management
stronger financial controls
new product-market focus
improved marketing
significant reductions in production costs
improved quality and service

particularly, more sharpbenders improved marketing and reduced their production costs. Fewer pursued acquisition as a route to change. Sharpbenders managed it "because of the range and effectiveness of the measures they used and the timing of them". - eg Caterpillar .

REMEMBER - turnaround strategies only apply to organisations, not whole industry sectors. Where the sector is problematic this may be more due to environmental factors.

"Tipping point leadership" can lead to turnaround - this involves a set of four hurdles that each have to be "tipped". They are cognitive - understanding the problem, resource - being able to deal with it, motivational - wanting to deal with it, and political - dealing with opponents to your approach.