Strategic focus is a common element in the strategies across successful firms. Two prevalent views of strategy are strategy as trade-offs and strategy as discipline. Michael Porter identifies three flavors of strategy: (1) cost leadership, (2) differentiation, or (3) focus of cost leadership or differentiation on a particular market niche; the combination of these flavors creates his five generic business-level strategies, see Figure 5.1. Firms can straddle these strategies, but such straddling is likely to dilute strategic focus. Strategy also provides discipline. Treacy and Wiersema’s three strategic disciplines are (1) operational excellence, (2) product leadership, and (3) customer intimacy. In the strategy as discipline mindset successful firms focus on one of these disciplines only creating a cult of the customer.
Strategic Management 2E by John Morris is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.