There are basically two generic strategies to achieve competitive advantage according to Michael Porter: Cost leadership and Differentiation strategy. Companies that fail to adapt any of these two strategies will end up in the middle of everything with no competitive advantage at all. And that, my friend, is the doomsday for any organization in any type of industry.
With these, firms can be then generally classified into three types: first, those that adapt one of the strategies, either, cost leadership or differentiation; second, those that opt to adapt both strategies and, lastly, those that are stuck in the middle.
Allow me to associate organizations and firms with people just like you and me in order to provide a simplified explanation for the abovementioned classifications which can spice the way we understand these generic strategies and competitive advantage.
Cost Leadership Differentiation
Type 1: Those who choose to stay at one end and focus on one strategy
These are people who are, literally and figuratively, very focused and have roadmaps, if not, cost benefit analysis, in every step that they take in their lives. These people are those who know themselves really well. They utilize their strengths to transform their weaknesses in achieving victories. They can identify their personal qualities which help these individuals in successfully positioning themselves in this world. These people choose one road and choose to remain in that road because they are quite certain that this will lead them to their aspirations and dreams.
Type 2: Those who want to be on both ends
These are the people who want to have the best of both worlds. They aspire for the perfect state by owning everything and believing that they can have the best of everything in this world. This state, however, is very difficult, if not, impossible to achieve. One may argue that this is possible given his/her resources and capabilities as an individual. Yes, one can attain such state but it is often temporary and never permanent. At a certain stage, a person will reach his/her saturation point where one is overly exhausted of trying to have both worlds. At which time, he/she will be forced to choose and strongly capitalized on just one end of the continuum.
Type 3: Those who are stuck in the middle
These are people who fail to adapt any strategy at all. They have the wait-and-see attitude because they are, generally, afraid to take considerable risk to choose which road to take. In fact, they stay in the crossroads long enough that cost them huge and missed opportunities.
These three types may not capture the entirety of man’s classification but one cannot possibly ignore that most of us fall into one of these types. So, what is the bottomline of the thoughts and arguments which I presented above?
It’s just that overanalyzed things again, I guess… hahahaha J
02.01.08
