According to Porter's generic strategy model, organizations have three basic strategic options at their disposal to gain a competitive advantage. In his various books, Porter developed three generic strategies that, according to him, can be used individually or in combination to create a defensible position and overcome competitors, whether they are within an industry or in all countries. A company that tries to participate in each generic strategy but fails to achieve any of them is considered to be “stuck in the middle”. Some companies that have successfully implemented one of Porter's generic strategies have found that they are unable to maintain the strategy.
Porter's generic strategies are the answer to one of the two central questions underlying the decisions that companies make regarding competitive strategy. The three generic strategies are an extremely simple way to see how you can place products or services in your market. Treacy and Wiersema (199), for example, are based on Porter's idea and modified Porter's Generic Strategies to convert them into Value Disciplines. Perhaps thinking about this model is a vision from the outside in, where generic strategies are inside, looking out.
Each generic strategy is a fundamentally different approach to creating and maintaining superior performance and requires a different operating model. Although they are called the 3 generic strategies, named after the main strategies of differentiation, leadership in overall costs and focus, the latter is actually divided into focus on costs and focus on differentiation, as shown in the following graphic.