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INTRODUCTION In the hawkish grocery store industries of category of domestic, international or global deliver very agonistical rivalry. address leading and oppositeiation strategies ar commonly used strategic management dimensions in the literature (Dess and Davis, 1984 Nayyar, 1993). But to achieve market superiority over competitors and profitability it has to make clear choice over the dodge used in order to avoid the inherent contradiction of different strategies (Porter, 1996, p. 67) In todays market for a company to survive, it has to create two corporate strategies 1.Lowest appeal without jeopardizing the character reference. 2. Better quality, simple way of operation and give look that means ability to be creative and innovative. According to Porter (1985) all generic competitory strategies have different way of cresting sustainable war-ridden advantage. And a company must always prefer a outline or else it ordain be stuck in the middle without coherent dod ging (Acquaah & Yasai Ardekani, 2006). umpteen companies for example Wal Mart and AirAsia have been implementing a single system very successfully.Examples of companies which has used differentiation strategy as single strategy successfully * specialism by Brand Harley Davidson and Mercedes Benz * speciality by Design Titan watches with gold studded gems, diamonds, precious metals. * speciality by Positioning Domino Pizza 30 minutes delivery * specialty by Technology Apple Computers * Differentiation by Innovation 3M. Further more(prenominal) there atomic number 18 successful companies which deem hybrid strategy which implies both cost leading & differentiation strategy at the same time.Eg Germans Automotive, Tesco supermarket, IKEA. Competitive Strategy It is the way by which firms choose to accomplish and hold their free-enterprise(a) advantage. Regarding competitive strategy Porter stated that taking offence or defensive actions to create a defendable s squeeze i n an industry, to cope with competitive forces and thereby yield a superior return for the firm. Companies have established different approaches to competitive strategy, as per the crisis companies should apply respective strategy. The basic of generic strategyPorter stated that companys strength is divided into two attributes cost advantage and differentiation. By applying these attributes in a broad and narrow focus, three generic strategies result cost leading, differentiation and focus. They do not represent any industry nor they are peculiar(prenominal) to any company. PORTERS GENERIC STRATEGIES Diagram 1 (Porter, 1980) zero(prenominal)mally means pursue a quality approach. Enables a price gift to be charged for the quality difference. Normally means pursue a quality approach. Enables a price premium to be charged for the quality difference.Aim to have concluding cost-base industry. Will facilitate favourable / cheaper pricing and thus grow market share in elastic industri es particularly. Aim to have lowest cost-base industry. Will facilitate favourable / cheaper pricing and thus grow market share in elastic industries particularly. Competitive Advantage Competitive Advantage Differentiation Differentiation Lower Cost Lower Cost Broad Target Broad Target 1. Cost Leadership Competitive dispatch Competitive Score 2. Differentiation Narrow Target Narrow Target 3 A. Cost Focus 3 B. Differentiation FocusConcentrate on one or a low number of market segments. Can be differentiation or cost leadership. Concentrate on one or a small number of market segments. Can be differentiation or cost leadership. Porter initially advised Firms to avoid attempting both Strategies Stuck in the Middle as out and out differentiators and cost leaders will ecstasyd to be more competitive. The success of Japanese (and other) firms with JIT, Kaizen and TQM techniques appears to provide evidence contrary to this view. Requirements for generic competitive strategies generic w ine Strategy Commodity Required Skills and Resources Common Organizational Requirements Overall cost leadership Sustained capital investment access to capital preposterous cost control Process engineering skills Frequent, detailed control reports Intense supervision of labour Structured organization and responsibilities Products designed for ease Incentives based on meeting strict quantitative Low-cost distribution system targets in manufacture Differentiation Strong marketing abilities Strong coordination among functions in R&D, produce development, and marketing Product ngineering Creative flare Strong capability in basic research Subjective measurement andincentives instead of quantitative measures Corporate personality for quality or technological leadership Amenities to attract exaltedly skilled labour, scientists, or creative people Long tradition in the industryor rum faction of skills drawn from other tradinges Strong cooperation fromchannels Focus Com bination of the above policies say at the particular strategic target Combination of the above policies directed at the regular strategic targetFour strategic types and their approaches to strategy (Miles and Snow)? 1. Defender * protect market share * hold current position 2. analyzer * seek market opportunities but protect existing areas * hold market share but with some innovation 3. Prospector * find new opportunities * exploit and take risks 4. Reactor * respond only to other * often late and inadequate COST AND DIFFERENTIATION STRATEGY Cost Leadership Strategy The cost leadership strategy represents cost control and efficiency in all areas of operation (Porter, 1980).A company that decides to follow cost leadership actually achieves it by performing Copernican value chain activities with lower cost (Porter, 1985). Cost Leadership strategy strives to supply a standard, no frills, high volume harvest-home with a competitive price to customers (Bingxin Li & Juan Li, 2008) which is preferred in developing countries India, China, Indonesia & Malaysia. This make product more competitive than others with brand image and good service (Hutchinson et al. 2007 Frambach et al. 2003 Porter, 1980).Cost Leadership channelize requires strong focus on supply side as oppose to demand side of market with high level competitor orientation (Day & Wendley, 1988). Cost Leadership strategy used by companies must benchmark them in a profitable position in the market place. As per Porter (1980), economical cost leadership strategy minimizes cost in areas like R&D, military services, Sales and Advertising. In Japan, Toyota Company has successfully implemented cost leadership strategy with increased efficiency (Schonberger, 1994) which is a different factor make up in this strategy when compared to the western countries. Allen & Helms, 2001) Differentiation Strategy The generic of differentiation strategy can be based upon design and brand image, distribution & so forth (Frambach. Et al. 2003). It involves by creating a place in the market that is realized as being different in the industry and has the capability to endure for a unyielding run (Porter, 1980). The effectiveness of strategy depends on competitive offering to customers (Slater & Olson, 2001) with unparalleled product for varied customer groups. This is with the aim to create minimum price of product in order to develop satisfaction and loyalty.A firm with differentiation strategy creates superior characteristics in terms of image, reputation, reliability and equality (Dean & Evans, 1994 Sashi and Stern, 1995). This creates qualitative difference in products & service, engaged in advertising programs, marketing techniques with premium prices ( miller, 1986). According to Acquaah and Yasai Ardekani (2006). Firms with competitive strategies has advantage over their rivals as they realized how unique their products and services are.The differentiation strategy has been successfully im plemented in France, Sweden, Canada with companies having advantage of Financial and technology resources, compassionate capital and modern management (Aulakh et al, 2000) Focus Porter defined focus as one of the generis strategies but later on mentioned it as moderator of cost leadership and differentiation strategy, Companies which apply this strategy normally focus on the market where there are less competition. (Pearson, 1999). Firms uses this strategy to stress on a limited positioning in the market and so it offers quality and specialized products for that position.Therefore sometimes focus strategy is referred as niche strategy (Lynch, 2003). This strategy allows the firm the misfortune to charge a premium price for its specialized products. Ferrari and Rolls Royce are examples of company using such strategy. The only problem with the strategy is that niche characteristic is not sufficient to justify companys attention. Stuck in the middle When a company fails to make a choice between the strategies then it is implied that the company is stuck in the middle. Thus affecting its profitability and resulting poor financial mathematical operation. (Peter, 1980)THE COMBINATION (HYBRID) STRATEGY The Porter Generic competitive Strategies (1980, 1985) cant be given unwarranted prominence. Competitive forces ( Allen and Helms, 2006 Miller, 1992 Spanos, et al. , 2004) has been termed hybrid, mixed, integrated or combination strategies. (Kim. Et al. , 2004 Spanos, et al. , 2004). They combine both low cost and differentiation elements (Gopalakrishna and Subramanian, 2001 Proff, 2000). A combination of cost leadership and differentiation strategies should be distinguish from stuck in the middle where firm fails to successfully pursue both. (Acquaah & Yasai Ardekani, 2006).A combination or hybrid strategy has been proved to be viable and profitable (Kim et al. , 2004 Miller & Dess, 1993 Wright et al. , 1991). Firms pursuing combined strategy achieved higher functioning than the other firms which apply single strategy. Combined strategy also helps the firm to minimize their vulnerability imputable to reliance on cost based advantages only (Yasai Ardekani & Nystrom, 1996). This hybrid strategy success depends on ability to deliver enhanced benefit to customers with low price and sufficient margins to reinvestment. Tesco Supermarket is following same the same strategy (Strategy Explorer, 2010)THE APPLICATION OF SINGLE STARTEGY Cost Leadership Strategy The cost leadership strategy is the basis for long run compare to price competition. Price competition is easily duplicated (Porter, 1980 Ellis & Kelly, 1992). In retail business cost reduction must be exploited which minimizes cost throughout value chain activities. Important issues in retail business are related with cost of goods sold. (COGS). Large retail business achieve more easily cost leadership due to more power supplier to secure low procurement prices for purchased goods (Elli s & Kelley, 1992 Anderer, 1997).Datuk Tony Fernandez as CEO of AirAsia Berhad said Before business can grow it needs to have its cost under control, efficient and profitable and also it must create value. AirAsia leader of LCC in Malaysia, Thailand and Indonesia will face competition from existing and new players and it need to make consideration & more stressed for the point of becoming the low cost carrier in the airline industries. Differentiation Strategy It emphasis several dimensions such as image, gain customer loyalty, innovation and level of service (Kim et al. , 2004) by generating differences n product through intensive marketing & image management (Miller 1988) and creating products which are innovative, dependable, durable, and serviceable (Beal & Yasai Ardekani, 2000) In retail business company, as for manufacturing companies two main arguments against Porter poser have emerged (Mintzberg, 1996 Worztel, 1987 Zentes and Anderer, 1994) * Strategies that combine severa l competitive advantages are not considered by Porter. * The reduction of possible competitive advantage to two basic types is simplistic & curiously differentiation advantages can be reached in different ways.The implementation of combination of Cost Leadership and Differentiation Strategy (Hybrid Strategy) This new hybrid strategy may become even more important and more popular as Global competition increase. With generic strategy company improve their ability to adapt quick environment changes and learn new skills and technologies involving customers value with products at low cost compare to competitors products. Cost leadership enables the company to charge the lowest competitive price and achieving competitive advantage by delivering value to customers based on both product features and low price.Competitive strategy is not only feasible but generates superior incremental performance result in multiple sources of competitive advantage. This will generate superior performanc e over the inability to success. The success of Japanese companies such as Toyota, Canon and Honda are best examples of cost leadership and differentiation strategies. (Ishikura, 1983). Porters Generic Strategies in Hospitality Industry 1. Cost Leadership Strategy Hotelier such as Fairfield Inns, Etap offer services which are basics. Thus by doing so, they sustain the cost at minimum and attract lot of market segment. . Differentiation Strategy Chain of hotels such as Marriott and Hilton apply this strategy by providing guests with high quality and special service and experience. 3. Focus Strategy Four Seasons only stress on elite guests and Burj Al Arab hotel only target guests such as royal families, celebrities, and rich industrialists. Five Forces Analysis Porter developed this model as a framework to understand the profitability about the industry. Mentioned below are the five forces * Suppliers power * Buyers power * The threat of substitutes * The ease of entry to the market The intensity of rivalry in the market Porter Five Forces that shape industry competition Example of a pharmaceutical company in US Potential New Entrants There are high barriers for entry especially in the US market due to the regulatory compliance, patent laws and the risk associated with the industry this remains a weak competitive force. The cost related to the R&D also limits the Potentials New Entrants. Suppliers Supplier power in low as the majority of the pharmaceutical sale is among the ten large pharmaceutical companies also they remain the major costumer for the chemical industry. Buyers The power of the buyers is a moderate competitive force. Increasing pressure is being use on the manufacturers to reduce the prices. In the pharmaceutical industry the end-user of the product has very low power as they buy the drugs that the decision maker or the doc prescribes. Substitutes This competitive power is weak when the products have the patent production but gets medium whe n they are off patent. CONCLUSION Successful organization adopts a combination of competitive aspect to build a hybrid strategy. i. e. Design and low cost, quality and price .Only competing on price is not good enough (Daan Assenss Learning , 2010). Cost leadership and differentiation strategies are very successful in much different kind of industries, for developing, transition and developed economics. Cost leadership, Differentiation and hybrid strategies have been successfully applied for very broad range of products and services from retail products to luxury products. TABLE 1 STRATEGIES USED BY THE COMPANIES No. Strategy Where has the strategy been applied Products/Services that the strategy has been applied 1. Cost Leadership Developing, Transition and developed economics (worldwide) Cars Industry (Toyota), Airline Business (Air Asia), sell Business (Giant and Carrefour Supermarket) 2. Differentiation Developing, Transition and developed economics (worldwide) Cars and Mot or cycle Mercedes Benz, Harley Davidson, Titan Watches, Domino Pizza, Apple , 3M 3. Hybrid (Combination of Cost Leadership and Differentiation Strategy) Developing, Transition and developed economics (worldwide) Car Industry Toyota, Honda, Furniture Industry IKEA REFERENCES Acquaah, M. & Yasai-Ardekani, M. (2006). Does the implementation of a combination competitive strategy yield incremental performance benefit? A new perspective from transition economy in Sub-Saharan Africa. Journal of Business Research 61, 346 354. * Anderer, M. (1997). Internationaliseerung im Einzelhandel. Deutscher Fachverlag, Frankfurt. * Aulakh, Preet S. , Masaaki Kotabe. & Hildy Teegen. (2000). 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