Strategic Analysis and Chance to Choose - Essay Example

Michael Porter (1985) further proposed that organisations pursingpursuing both cost leadership and differentiation strategies have in fact no competitive edge at all. and Rather, he asserts they are in fact "'stuck in the middle"' between both cost leadership and differentiation strategies resulting inwith no clear strategy for competitive advantage. Although I have chosenWhile the two chosen organisations within my industry I feel meet the criteria for this report, one organisation following cost leadership strategy whilst and the other following differentiation strategy, I feel somewhat reluctant to agree that an organisations within today's business environment are arguably not entirely restricted by Michaels Porter's proposed strategies on competitive advantage.

The two organisations chosen for this report compete within the computer aided manufacturing software industry. EdgeCAM by its name is developed and distributed directly by Pathtrace Limited and is a third generation computer aided and manufacturing software package., its counter part within competitive analysis is SolidCAM is also computer aided manufacturing (CAM) solution. Porter proposed that along with cost leadership and . of Ccost leadership, differentiation and focus organisations strategies can achieve competitive advantage for an organisation, according to Porter.

Organisations following cost leadership strategy typically involve are companiey's engaged inthat delivering their product(s) and at the lowest quality level acceptable by to buyers that will lead them to cost advantage over their competitors. Cost leadership is more about how the company can leverage its product within its market through effective ongoing cost efficiencies within the organisation, backed-up by strong management concentrating on fully utilising the company'sir resources to their fullest.

In contrast, organisations following a differentiation strategy seemingly are willing to actually add costs in order to increase'add' the value through by which they differentiateing their products. that will appeal to given series of buyers within the market. This could in fact be throughSuch cost increases could be aimed at achieving superior quality or performance of the product, or less intangible items like post-after sales service. Porter's differentiation strategy in similar respects followsis similar to branding strategy in which the strategythat relies on promoting 'distinctive' brand elements of the product.

(Kotler P and Keller K, Marketing Management P.296)Porters also proposed a third strategy of called focus. Thise theory behind this isholds that customers have very different products or service needs, and therefore can be grouped together to form narrow niches within the industry. These segments or groups are then targeted in a. Unlike cost and differentiation strategies the focus strategies is similar manner to the