Nowadays organizations are always looking for strategies and tools to achieve their goals, objectives and maximize their profit margins. For this, it is necessary to obtain a competitive advantage that generates greater benefits for the organization, when the organization has a competitive advantage. to the use of multiple strategies such as generic, which makes the company generate higher profits than the average of other competing companies in the market.
According to Michael E Porter (1982), he defines the generic Competitive Strategy which consists of taking defensive and offensive actions to establish a defensible position in the industry, to effectively face the five competitive forces and thereby achieve an excellent return on the company's investment..
In other words, organizations follow a business-level strategy to achieve a competitive advantage that allows them to exceed the performance of other competitors in the market and achieve higher returns than the average of other competitors operating in the market, where the Generic strategies aim to outperform competitors; To achieve these returns, they rely on three competitive generic approaches.
The first one stands out
1. Cost leadership strategies
It is offering products or services to customers at a lower price than other competing companies.
2. Differentiation
It is the process of designing a product or services that must be novel and attractive to customers that at the same time includes the quality of products or services that better satisfy the customer's needs than other competing companies; when a product is unique and different from other competitors it is the result of innovation and the essence of the strategy is innovation.
3. Concentration strategy
It refers to meeting the needs of a group and the market segments to which the product is directed by the type of clients, by the type of products and by the type of geographic; This strategy seeks to achieve objectives and goals of the organization.
According to Effy Oz (2008) From Information System Management; A company has a competitive advantage over its rivals when its profit increases dramatically with a greater market share than the other competing companies that operate in the market.
There is no doubt that nowadays a company always seeks to obtain the maximum profit from its products or services that they offer in the market and its greater market share, which depend a lot on the use of the multiple strategies and tools that they adopt for the development of their businesses.
Bibliography
- Michael E. Porter (1982) Competitive strategy: techniques for the analysis of the industrial and competitive sectors. 1st Edition CECSA Editorial Effy Oz (2008) Information System Administration 5th Edition. Editorial.CENGAGE Learning.
