Michael Porter’s strategy focuses on five strategies, that include:
competition in the industry, potential of new entrants into the industry,
power of suppliers, power of customers and threat of substitute products.
(Scott, 2020) The five forces should be used with the strength and
weakness analysis. This will determine what threats the company face
currently and in the future. The opportunities that the company have to
expand to other countries. It will give the information about the newly
developed line for upscale clients. It will also identify the problems about
the efficient of the company’s plant.
B. Select the best strategy for the Smithfield company to pursue from the
two strategies Porter presents in his model and explain why that particular
strategy is better than the alternative.
Low Price Leadership Strategy “the strategy is to produce (or purchase)
comparable value goods or services at a lower cost than its competitors.
The lower cost will attract the majority of customers and allow it to profit
by the volume of goods sold” (Lumen, n.d.). They must include
Differentiation Leadership Strategy to become successful in the furniture
business. That will ensure that the customers will support them while
paying high prices.
C. Using this week's course readings, assuming Joan Smithfield accepts your
recommendation, what is the next action she should take to determine if
your recommendation is correct? Be specific. Use in-text citations and list
references from course readings as required.
“The competitive advantage theory suggests that states and businesses
should pursue policies that create high-quality goods to sell at high prices in
the market. Porter emphasizes productivity growth as the focus of national
strategies” (Lumen, n.d.). Using the recommended strategy, the company
will grow tremendously. The buyers will buy the products even at a high
price because they are not price sensitive. Also, it will force out the rivals
because they will not be able to keep up with the company.
References
https://courses.lumenlearning.com/wmopen-
principlesofmanagement/chapter/stages-and-types-of-strategy/
Scott, G., 2020.
Porter's 5 Forces
. [online] Investopedia. Available at:
<https://www.investopedia.com/terms/p/porter.asp>.
