An Understanding of Porters Strategy - Essay Example

Porter’s value strategy and advantage decision making in the main key player’s of the IT world Managerial tact and strategies are important for the success of any organization. In the modern world of business, competition has become so thrift that innovative strategies have to be laid down to help a business cut a niche for itself. In particular, information technology has brought new challenges as well as innovations which are peculiar. In the following discourse, the focus would be on workable strategies for firms in the IT industry. The discussion would be on highlighted IT firms in terms of relevant managerial strategies as well as tact. In particular, the argumentative analysis would focus on Porter’s value strategy. The relevance of the strategy has to be related to decision makings in the IT world. Of particular interest is that the argument has to bear relevance to the moves and strategies that have been employed by some of the leading It firms in the world at present. An understanding of Porter’s Strategy The strategy employed by Porter in analyzing or even understanding a market is in two tiers. In normal business operations, two factors usually come into play. These are the demand together with the supply. Understanding of the two in any particular business environment guarantees success as well a well leveraged competitive advantage. Porter looks at the business environment from either the perspective of a demand warranting or compelling a move and from the viewpoint of a firm or business organization having the astute resourcefulness to warrant the competence handling any arising business opportunity (Griffin 244). The two tier approach used by Porter is theoretically expressed through a three dimensional matrix. The two dimensions that have been fronted by Porter can be grouped under three strategies. The strategies involve having a cost leadership, employing the element of differentiation as well as being focused (Mun 10). The following part explores the relevance of some of the postulations by Porter on highlighted IT firms in the global domain. Cost leadership In every business model, the leadership is responsible for steering it towards realizing profitability as well as the desired success (Mun 10). In analysing leadership, there are various factors that have to be looked at. For instance, there is the aspect of visionary leadership. An innovative leader definitely compels the whole firm as well as business to seek ways of solving their problems in an innovative manner which improves profitability. There are several ways in which the leadership of the firm can be described as a cost leadership. Or instance, seeking for cheaper forms of labour or even materials in the case of a manufacturing firm gives leverage which would competitively give advantage to the firm. Apple Inc. In this regard, a perfect example would be the Apple Inc. which was led by the late Steve Jobs. Before his death, the leader of the company was responsible for virtually every innovation that the firm would take (Imbimbo 7). For instance, in terms of cost reduction measures, Steve Jobs deliberately outsourced some of the jobs in the manufacturing of the company’s gadgets to China which is a location which guaranteed cheaper production costs. In fact, the company benefited in greater ways in the production process since it enabled it to meet the demand which the market was presenting. It should be noted that the demand for the products of the company was incredible if not overwhelming. Other than outsourcing some of the production processes to China, the company constantly engaged in innovation and other technologies which made the costs of its products reduce. For instance, the innovation of the iTunes stores is one which is attributed to the revolution that the company brought about. It transformed the experience that people had I terms of purchase of digital music and other items such as eBooks. Consequently, as a result of innovation and providing cheaper alternatives to the challenges that were part of the demand in the market at the time, the company cut a niche for itself. The result of such cost reductive leadership could be seen in the popularity of the products of the firm. For instance, iTunes has transformed to be one of the leading platforms for listening, buying, or even downloading music (Lu?sted 68). The principle of cost leadership should be carried out expeditiously to avoid compromising on the quality of the product released to the market. Besides, manufacturing regulations have to be observed to avoid any controversies or even legal battles. In the case of Apple Inc, the company has always been accused of labor law contraventions in China. For instance, the company has faced criticisms for profiting from the unfortunate workers in China who are subjected to poor working conditions. In a rare instance, one of its production lines in china was accused of employing children. These are some of the factors that must be critically assessed in coming up with a strategy in gaining a competitive advantage in the market. In retrospect, the strategy employed by Apple under the then tutelage of its iconic leader, the late Steve Job, shows some relevance to the management strategy that was fronted by Porter. For instance, Porter postulated the concept of a strategic scope. This involved sizing up the market and knowing the demand then coming up with a product which suited the demand of the market. This is actually what happened when the Apple Inc. came up with applications such as iPad. An iPad was a solution to the demand of portability infused with all the features that a computer would provide. On the other hand, Porter’s management strategy also incorporates the dimension of strategic strength where the leadership is seen seeking ways of meeting the demands of its products in the market. The confidence in competence is a guaranteed way of winning the trust of the customers. All these strategies helped the firm stay ahead of the competition in terms of innovation and design. Besides, in terms of cost effectiveness, the products are priced at relatively affordable prices which are also a winner for the company. Differentiation In terms of Porter’s management strategies, differentiation implies that a business has to come up with innovative products which make it unique from the other competitors (Mun 10). The differentiation in products entails all the other aspects of price or cost production as well as customer satisfaction. If this is achieved, the product that is put out by a firm is likely to attract much attention which would translate into improved sales in the end. Basically, the intention of having product differentiation is to have a sense of belonging from the targeted clients in order to create what has come to be known as brand loyalty. In the following part, the focus would be on Samsung. Samsung Samsung is one of the leading technology firms worldwide. It focuses on an array of IT oriented products. For instance, it manufactures microprocessor chips which it uses for its devices and has also been subcontracted to the same for other technology firms like the Nokia. However, the study focuses on Samsung’s mobile phone innovation christened the Galaxy phone series (Hughes 9). The Galaxy 4s from Samsung, for instance, is a product that promises the user a totally different experience in using it. It promises and delivers a different menu in terms of user experience and the mobile application packages on offer. The design of the phone is quite unique and one of a kind. In addition, the durability of charge of the battery also makes it quite unique from the other mobile phone manufactures in the market (Hughes 9). The popularity of the galaxy series phones from Samsung can not be overlooked. The subsequent phone from the company, Galaxy 5, has been quite anticipated. From the uniqueness of the product that has been designed by the company, Samsung has remained one of the industry leaders in terms of innovation of mobile telephony technology (Gookin 5). By extension, this has seen the profitability of the company improve. The downside of such innovations is that there are possible controversies that are likely to come about from competitors. For instance, in the case of the Samsung, the company faced a legal tussle with Apple Inc. over copyright infringement issues. However, the issue was resolved amicably in a court of law. Facebook In terms of differentiation, Facebook and Twitter are leaders in the social media market because of the uniqueness of their products. For instance, Facebook is actually viewed as an industry leader because of the unique products that it offers its users. For instance, it allows chats, video messaging, gaming, and marketing on the same platform (Baloun 7). Besides, it still serves its fundamental function of being a platform through which people share ideas and communicate. Such factors make it a market leader in an industry which is crowded with competition from the likes of google plus, Linkedln, and even tagged. Focus This is also a strategy that was fronted by Porter. It entails identifying the target market then working towards eliminating competition in that particular market (Mun 10). Apple Inc, for instance, came up with the iPod as devices targeting music lovers. The device became so popular that it edged out competition from established products like walkmans. This strategy is akin to sizing up the demand as was highlighted in Porter’s two dimensional strategy of management (Eldring 11). Conclusion Businesses need to be relevant in terms of the dynamisms that characterize the markets in which they operate. One way of achieving this through employing workable strategies. Porter is noted to have suggested a matrix of three strategies which sizes up the market from two dimensions in terms of the demands as well as the supply. This has been discussed above in view of firms in the IT market such as the Samsung, Facebook, and Apple Inc. the strategies include having a cost leadership, employing the aspect of product differentiation, as well as focusing on the target market (Griffin 244). Works Cited Baloun, Karel M. Inside Facebook: Life, Work and Visions of Greatness. Victoria, B.C: Trafford, 2007. Print. Eldring, Jan. Porter's (1980) Generic Strategies, Performance and Risk: An Empirical Investigation with German Data. Hamburg: Diplomica-Verl, 2009. Print. Gookin, Dan. Samsung Galaxy Tab 10.1 for Dummies. Hoboken, N.J: Wiley, 2012. Print. Griffin, Ricky W. Management. Mason, OH: South-Western Cengage Learning, 2011. Print. Hughes, Bill. Samsung Galaxy S for Dummies. Hoboken, NJ: Wiley Pub, 2011. Internet resource. Imbimbo, Anthony. Steve Jobs: The Brilliant Mind Behind Apple. Pleasantville, NY: Gareth Stevens Pub, 2009. Print. Lu?sted, Marcia A. Apple: The Company and Its Visionary Founder, Steve Jobs. Minneapolis, MN: ABDO Pub, 2012. Internet resource. Mun, Hwi-ch?ang. Global Business Strategy: Asian Perspective. Singapore: World Scientific, 2010. Print. Read More