The Applicability of Porter’s Generic Strategies in the Digital Age: Assumptions, Conjectures, and Suggestions

Abstract

Because current management theories evolved in the context of brick-and-mortar firms, this paper examines three key questions raised by the advent of e-business: (1) Will the strategy types found among e-business firms resemble Porter’s (1980) generic strategies? (2) Will we find performance differences among e-business firms pursuing different types of strategies? (3) Will we find differences in the strategy-performance relationships of pure online firms (pure plays) and firms with both online and offline operations (clicks-and-bricks)? We conclude that integrated strategies that combine elements of cost leadership and differentiation will outperform cost leadership or differentiation strategies. We also argue that, regardless of business strategy type, clicks-and-bricks firms that closely integrate their on-and offline operations will enjoy performance advantages over their pure play counterparts.

Generic Strategies and Firm Performance: An Investigation of Informal Sector Micro-Enterprises in Kenya

“…Finally, focus strategies target segments of the market whether a specific consumer group, product line or geographic area. Porter's generic strategies typology have been widely accepted by researchers who posit that companies are more likely to pursue 'hybrid', 'mixed', 'integrated' or 'combination' strategies, leading to superior performance rather than pursuit of a single generic strategy (Kim et al 2004;Spanos et al, 2004).…”

“…Kim et al 2004, Spanos et al 2004, Pertusa-Ortega et al 2009). The efficacy of these theories and derived models have been extensively empirically demonstrated over the years through research carried out on medium and large enterprises in developed countries, mainly in the Americas, Europe and Asia.…”

Semantic metadata in the publishing industry – technological achievements and economic implications

“…It has been adopted in a variety of ways for the information industry (i.e. Zerdick 2000; Kim et al 2004), and recently, it has also gained popularity to systematize the value creation process in data-driven business models as part of the European Commission's Open Data Initiative (COM/2010/0245 final).…”

Competitive Strategy and Performance in Mexico, Peru, and the United States

“…The increasing interest in firm resources, however, does not mean that testing strategy typologies is no longer useful, especially in emerging economies where such testing has been limited (Kim, Nam, & Stimpert, 2004;Kimura & Mourdoukoutas, 2000;Leiblein, 2003;Parnell, 2008;Pitelis & Pseiridis, 1999). In addition, the pace and intensity of change in the global business environment have become much more pronounced during the past two decades.…”

“…In addition, the pace and intensity of change in the global business environment have become much more pronounced during the past two decades. As a result, speed has become more valuable as a competitive weapon, while the Internet has minimized the importance of physical boundaries and distance, and can enable firms to serve larger markets more efficiently (Kim et al, 2004).…”