On whose work did position school build its concept?
The concept of positional school was built upon the work of Michel Porter from his books ‘Competitive strategy’ (1980) and ‘Competitive advantage’ (1985). It believes that Strategy is the process of selecting from the generic strategy and implementing it as a follow through mechanism of the business logic of the generic strategy.
Thus according to Porter 5 forces, there are only two types of basic competitive which are the differentiation and the low cost. Porter combined the scope crystalizing three generic strategies:
leadership in cost – producing and selling low-cost goods; differentiation – innovation in producing unique goods; focus – to operate in the limited market segment.
Porter has identified five competitive forces which determined the intensity of competition, hence the profitability and attractiveness of an industry. The model supports analysis of the driving forces thus management can decide how to influence or to exploit particular. These forces are:
- Threat of new entrants
- Bargaining power of firm’s suppliers
- Bargaining power of firm’s customers
- Threat of substitute products
- Intensity of rivalry among competing firms
Porter believes otherwise stating that only a few generic strategies survive competition in the long run which is the exact definition of the Positioning school.