In Addition to the Five Forces Model of Industry Competition,Michael

question 37

Essay

In addition to the five forces model of industry competition,Michael Porter has developed a framework of so-called generic business strategies.Explain these generic strategies,describing their aims and application.

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Definitions:

Profit Difference

The variance between the estimated profit and the actual profit realized, indicating effectiveness of financial management and operations.

Weight Allocation

Weight allocation refers to the method of assigning proportions of a total, such as costs or resources, based on the relative weight or importance of various components or activities.

Physical Units Method

An inventory costing method that allocates costs based on the actual physical units of goods available for sale or use.

By-Product

A secondary product derived from the manufacturing process or chemical reaction that is incidental to the main product.