Free Essay on Porter's Competitive Strategies

Published: 2022-07-01 11:02:08
Free Essay on Porter's Competitive Strategies
Type of paper:  Essay
Categories: Business strategy
Pages: 3
Wordcount: 644 words
6 min read

In his book, Michael Porter provided generic competitive strategies that could be used by businesses to attain competitive advantage. Porter provided three strategies which included cost leadership, differentiation, and focus. The focus of this paper will be to outline which of the three approaches I would apply in business as an entrepreneur and how the procedure would use technology.

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The strategy that I would Use and Why

Among the three plans, I would use the cost leadership approach as an entrepreneur. According to Porter (1985), the cost leadership strategy encompasses a firm striving to become a low-cost producer. By becoming a low-cost producer, a company's cost of producing one unit of a good is lower compared to other firms in the industry. For a business to become a cost leader, it should take have the advantages of size and economies of scale (Littler, 2015).

One of the reasons why I would choose the strategy is it leads to higher profitability in business. Since an enterprise's cost of operations is low, it, therefore, benefits from higher profit margins. Besides, using a low-cost strategy increases the sustainability of a business. Sustainability is primarily instrumental since it enables the business to survive tough economic times as well as price wars in the industry. Companies that have low costs of operation are often better able to withstand such scenarios since they will be able to break even or manage to remain profitable. The third reason as to why I may use the cost leadership strategy is that it enables a business to gain capital for growth. By ensuring that operating costs are low, a company can use part of the high-profit margins to fund other profitable initiatives.

How the Strategy Would Use Technology

The implementation of the cost leadership strategy can use technology. The cost leadership strategy can use technologies that can enable a company to lowers the cost of production. One way in which the approach can employ technology is through automation by introducing tools such as FreshBooks and Xero. These tools can be instrumental in helping a company reduce its wage bill since it eliminates the need for using human labor since they automate functions such as invoicing, accounting and taxation thereby saving time and resources that can be used in other business areas (Dholakiya, 2015).

Another way through which technology can be applied in the business is by using robots to optimize the manufacturing process. Robots eliminate the need for using workers which therefore helps reduce the cost of maintaining employees in an organization. Also by automating tasks using the robots, a business can be able to fast track production thus enabling the production of an increased number of units in a specified amount of time. For instance, if the enterprise were a car assembly plant, it would use collaborative robots which can be used in welding. An example of the successful application of the robots can be manifested in an automotive plant in China called the Great Wall Motors which uses these types of robots and can perform 4000 welding operations in a car body in 86 second (Barrette, 2014). The performance by far surpasses human capabilities in doing the same type of work. Conclusion

Among the three strategies provided by Porter, I would pursue the use of the cost leadership strategy. The reason is that it may lead to high profitability, enables sustainability and provide capital for expansion. The approach may use technologies such as collaborative robots, FreshBooks and Xero for automation which eliminates the need for human labor.


Barrette, M. (2014). Top 5 Robotic Applications in the Automotive Industry. Retrieved July 15, 2018, from

Dholakiya, P. (2015). 4 Ways to Cut Costs Using Technology. Retrieved July 15, 2018, from

Littler, D. (2015). Cost leadership strategy. Wiley Encyclopedia of Management, 1-1.Porter, M. E. (1985). Competitive advantage: creating and sustaining superior performance. 1985. New York: FreePress, 43, 214.

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