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Porter27sRisk

By Ruth Bailey,2014-06-12 17:38
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    Table 3.7-2: Risk of the Generic Strategies Risk of cost Risks of

    leadership Differentiation Risk of Focus

    Cost leadership is not Differentiation is not The focus strategy is sustained sustained imitated

    The target segment ; Competitors imitate ;Competitors imitate

    becomes structurally ; Technology changes ; Bases for

    differentiation become unattractive ;Other bases for cost

    leadership erode less important to ;Structure erodes

    buyers ;Demand disappears

    Proximity in Cost proximity is lost Broadly-targeted differentiation is lost competitors

    overwhelm the

    segment

    ;The differences from

    other segments slight

    The advantages of a

    broad line increase

    Cost focusers achieve Differentiation New focusers even lower cost in focusers achieve even sub-segment the

segments greater differentiation industry

in segments

Source: Porter (1985: 21)

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