Porter’s 3 competitive strategies

Discuss ways your business project could use each of Porter’s 3 competitive strategies: cost leadership, differentiation, and focus. How would the company have to change to handle each?

The objective of Michael Porter’s competitive strategies is to seize the competitive advantage over the long run. This competitive advantage can be based on the cost leadership or differentiation strategy. Porter’s competitive strategies include cost leadership strategy, differentiation strategy and focus strategy. Lets learn.com needs to decide which strategy will be most suitable according to the business structure, priorities and goals. Let's now look at the application of these strategies for letslearn.com.

Cost Leadership Strategy

In cost leadership strategy letslearn.com should seek to achieve the position of lowest cost online learning and collaboration service provider to the student community. In this strategy letslearn.com can compete on price with the rivals to enter and capture market share to earn profits. To adopt a cost leadership strategy letslearn.com should focus on the following:

• Letslearn.com should target based on economies of scale by ensuring the availability of the services to as many number of students as possible.
• Use the latest technology and ways to minimize the operational cost.
• Concentrate on increasing the number of member students as much as possible.
• Minimize overhead costs to achieve the low cost service goal.
• Increase membership of professors and tutors to the optimum level.
• Try to provide free or low cost features.

Differentiation Strategy

In the differentiation strategy it is assumed that competitive advantage can be achieved through distinguishing features of the service. In this case if letslearn.com adopts the differentiation strategy, the focus should be on high value added services with distinctive features that are not available with others in the industry. Letslearn.com should provide a great deal of quality resources with high cost and include:

• Offer special features relating to online resources, counseling and access to research networks.
• Build a brand image among the students as a solution to every problem.
• Focus on innovating new and advanced features that can create a difference in the lives of student community.
• Letslearn.com will need a strong promotion campaign to successfully communicate the strengths of the services like quality, reliability and high-tech based.
• Highly enthusiastic and motivated team of professionals to create and update the new and advanced features
• Provide access to leading research materials and resources etc.

Focus Strategy

The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. Letslearn.com can segment the different level of students according to grade/class/subject and location etc. to either follow cost advantage or differentiation strategy. In the segment with cost focus strategy company should focus on low cost, high volume of members and low level of differentiation to save cost. In the segment where letslearn.com wants to use a differentiation focus strategy, the company should provide high value added features and access to worthy materials.