166  Blockchain

Porter defined the generic strategies as follows:

1. Cost leadership (no frills)

2. Differentiation (creating uniquely desirable products and services)

3. Focus (offering a specialised service in a niche market)

⚬

⚬Cost Focus

⚬

⚬Differentiation Focus

Cost leadership strategy

Porter’s cost leadership is all about gaining market share through providing

cheaper products to the customers. Within cost leadership strategy, a com-

pany can gain market share through the following:

• Reducing the cost of the product whilst charging industry-average

prices. The aim is to increase profits by reduction in cost to create a

product or service.

• Charging the customer a lower price for a product to increase market

share. The aim is to increase market share while still making a reason-

able sum of profits.

Scope

Broad

Cost Leadership

Differentiation

Narrow

Cost Focus

Differentiation Focus

Cost

Differentiation

Figure 6.2  Source of competitive advantages.