Executive summary.

Strategic management is one of common topic of many authors and different authors has introduced many different concepts and theories. Michael Porter is one of the famous management guru and may be most cited author in management field. In 1980, he introduced generic strategies in his book called “competitive strategy”. Then different authors argue about the generic strategies and even today these strategies are discussed. Main objective of this study is that critically evaluate the generic strategies. Initially, this study is define the generic strategies. Generic strategies have been changed overtime. Initially Porter introduced three strategies called cost leadership, differentiation and focus. Latter, he divided focus strategy as cost focus and differentiation focus. Further, he introduced three positioning strategies which support to gain competitive advantage. Therefore, this study discuss how generic strategies are introduced and how strategies are changed overtime. Throughout these decades, many authors have been argued about the Porter’s generic strategies. Therefore, this study is discussed arguments against and support the generic strategies. Thus, new adaptation of generic strategies such as hybrid strategy and the best cost strategy also have been discussed here. Further, this study explains how generic strategies fit for today business environment with other modern concepts of strategic management. On the other hand, it further discuss how generic strategies are relevant or not for today business challenge. Second part of this study discuss the practical aspects of the generic strategies. In second part of the study, it is discussed about the company which follow the generic strategies and how the company find the solutions for issues that faced. Watawala tea Ceylon limited which is one of famous plantation company of Sri Lanka is used to analyze the strategic application. Company has different product range which follow different generic strategies. Secondary data such as journal articles and subjected related books have been referred to conduct this study.

Part 01

Generic strategies.

Generic strategies refer the base which a firm use to achieve its desired position within its business environment. According to Michael Porter, there are three generic strategies that companies can follow to achieve the sustainable competitive advantage.
• Cost leadership strategy
• Differentiation strategy
• Focus strategy.

Cost leadership strategy – A company that finds and exploits all kinds of cost benefits and target to becoming the lowest cost producer in the industry pursues a sustainable cost leadership strategy.
Differentiation strategy- A company that try to be unique in the particular industry with some dimensions of its product or services to add more value to customers.
Focus strategy – This strategy focus on narrow competitive focus.
A company selects a narrow segment in the industry and adapt company strategy to serve that narrow customer segment.
Porter developed this theory in 1980 and he firstly introduce above three generic strategies. These three strategy have been further explained below.