Focus Strategies

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Definition: Focus Strategies

Also known as the Porter’s Generic Strategies, it is based on the concept that a firm’s competitive advantage and strengths ultimately are due to one of the two factors – cost advantage and differentiation. It is used to determine the firm’s profitability and position for a sustainable competitive advantage in the industry.

It is called a generic strategy because it is neither industry of firm dependent. By applying these two factors in either a broad or narrow scope result in three generic strategies. They are cost leadership (e.g. Walmart), product differentiation (e.g. McDonalds) and cost/differentiation focus (e.g. Pepsi Co.), which can be given below.

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