Generic Competitive Strategies

Porter describes a structure for evaluating the behavior of costs, the determinants of relative cost position, and the way firms can gain a sustainable cost advantage or minimize their cost disadvantage. The study also reveals the cost differentiation, and the ways a differentiated competitor can lower costs in the areas that do not undercut its differentiation. Porter also made a concrete proposal over the value chain and its connection to cost analysis. Porter said that "the value chain provides the basic tool for cost analysis". He began describing the pattern of the value chain relativ…