Critical Evaluation and Comparison of Porter’s Generic Strategies and the Strategy Clock

Assignment Brief

Strategic Management

A. Critically evaluate and compare the Porter’s Generic Business Strategies model with the Strategy Clock for business strategies. (700 words – 60 marks)

B. Using the Strategy Clock, explain the existing business strategy of either NIKE or IKEA and recommend with justification, key strategic actions needed to improve the UK market share of either NIKE or IKEA. (500 words – 40 marks)

1. Demonstrate coherent and detailed knowledge and understanding of strategic management within a global and sustainable context.

2. Explain, critically analyse and evaluate conceptual frameworks, models and theories to aid strategic analysis and decision making

3. Identify strategic problems and issues facing a range of organizational types and situations

4. Generate and evaluate strategic actions and solutions to problems within complex and unpredictable environments.

Sample Answer

Strategic Management

A. Critical Evaluation and Comparison of Porter’s Generic Strategies and the Strategy Clock

Strategic management involves determining how firms compete effectively within their industries by creating sustainable advantages. Two of the most influential frameworks for analysing competitive positioning are Porter’s Generic Strategies (1980) and Bowman’s Strategy Clock (1995). Although both models aim to explain how organisations achieve competitive advantage, they differ in scope, flexibility, and depth of analysis.

Porter’s model proposes that firms can gain a competitive edge through one of three distinct strategic positions: cost leadership, differentiation, or focus. The cost leadership strategy aims to be the lowest-cost producer in the industry, allowing a firm to compete primarily on price. For example, Ryanair has pursued this approach by reducing operating costs and offering no-frills services. In contrast, the differentiation strategy involves offering unique features valued by customers, which allows the company to charge a premium price, Apple is a common illustration. The focus strategy targets a specific niche, applying either cost leadership or differentiation within that segment (Porter, 1985). Porter argued that trying to combine these strategies would leave a firm “stuck in the middle,” unable to achieve either low cost or meaningful differentiation.

However, Porter’s framework has faced criticism for being overly rigid. The assumption that cost leadership and differentiation are mutually exclusive has been challenged by empirical evidence. Many modern organisations, such as Toyota or IKEA, successfully blend elements of both, offering differentiated designs while maintaining cost efficiency. Furthermore, Porter’s model has limited explanatory power in today’s dynamic markets, where technology, customer expectations, and sustainability pressures require flexibility and innovation rather than strict adherence to a single generic strategy (Mintzberg et al., 2003).

In contrast, Bowman’s Strategy Clock builds upon and extends Porter’s ideas by offering eight possible positions for competitive strategy based on two dimensions: price and perceived value. The model provides a more nuanced representation of competitive options, recognising that multiple combinations of price and value can coexist. The first two positions (1 and 2) focus on low price, while positions 3 to 6 highlight increasing differentiation. Positions 7 and 8 represent failure strategies, where high price and low perceived value lead to competitive disadvantage (Bowman & Faulkner, 1997).

A key strength of the Strategy Clock is its flexibility. It acknowledges hybrid strategies, combinations of low cost and differentiation, that are increasingly prevalent in contemporary markets. For instance, IKEA achieves cost efficiency through flat-pack production while providing modern, well-designed furniture that appeals to value-conscious consumers. Bowman’s model also allows strategic shifts over time, recognising that firms may adjust their positioning in response to environmental or technological change. This adaptability reflects real-world competition more accurately than Porter’s original framework.

However, Bowman’s model is not without limitations. It is primarily descriptive rather than prescriptive, meaning it illustrates possible positions but offers less guidance on how to achieve or sustain them. Additionally, it oversimplifies complex factors influencing value perception, such as branding, service quality, and sustainability. Nonetheless, its integration of customer perception as a central element makes it highly relevant in consumer-driven industries.

In summary, while Porter’s model provides a foundational understanding of competitive strategy, Bowman’s Strategy Clock offers a more dynamic and customer-oriented framework. Porter’s clarity and simplicity make it a valuable starting point, but Bowman’s model better reflects the complexity of modern business environments where hybrid and flexible strategies dominate. In essence, Bowman complements rather than replaces Porter, providing managers with a more adaptable lens through which to evaluate competitive positioning.

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