Generic business strategies

There are many ways in which a business might approach the task of building or maintaining concrete competitive advantages. However, management literature and strategy planning practice recommend a limited number of basic strategy types derived from a classification of possible competitive advantages. These are referred to as generic competitive strategies or generic business strategies. As Figure V.1 suggests, we propose that first a basic decision should be made as to the type of strategy and that this should then be specified by defining competitive advantages.

Usually the selection of the generic strategy for a business to follow is not problematic: in most cases consideration of the competitive situation and available resources leaves little choice. But it is very important that this choice should be made clearly and explicitly: the generic business strategy provides the framework within which the concrete competitive advantages at the level of the offer and at the level of resources are next determined. If no clear decision is taken, there is the danger that the different target competitive advantages will not fit well together and the hoped-for positive synergies between them will not be realized.