Porter’s generic forces affiliation Based on porter’s definition of what the generic strategies mean, the Velib case study fits in the focus strategy. According to MacRae (n. d) and Tanwar (2013), the focus strategy aims at concentrating on a few selected markets. In other terms, the focus strategy is known as the niche strategy. As per the tenets of the focus strategy, a firm that has adopted this approach chooses to focus only on a narrow market and then specializes in it. By concentrating in one particular market, a company will gain a competitive advantage over its competitors.
Further, MacRae (n. d) continues to assert that strategies such as market development and penetration are real incentives to offering a firm a competitive advantage over its competitors. The focus strategy can be utilized by both large and midsize companies but only in conjunction with cost leadership and differentiation strategies. In fact, all firms usually follow differentiation strategy because if one company ends up differentiating its products, its competitors must often find ways to differentiate their products (MacRae n. d). The focus strategies are normally effective when the consumers develop a distinctive requirement and when competitors are not trying to specialize in the same target market. Carefully looking at the Velib case study, the strategy here is to specialize in a small niche of the market.
Because of targeting the Paris market, the Velib firm is equipped with more 20,600 bikes and a whopping 1,451 stations within the city (Hemne, Orsato &Wassenhove 2010). The Velib system is specialized in such a way that it focuses on high-performance services that enhance all customers to take advantage of inexpensive and practical means of transport each day for 24 hours per week.
The operation of the business within twenty-four hours, a week is evidenced when Pierre could only find two bikes even though it was on a Sunday (Hemne, Orsato &Wassenhove 2010). The Velib firm shows a great deal of differentiation as asserted by porter’s strategies. The bikes are designed in a unique way that is different from the traditional bikes found around the city. Hemne, Orsato and Wassenhove (2010) contend that the bikes are designed to be used for the mass use and do not have visible cables, heavy than the traditional ones and contain baskets for carrying groceries or bags.
Based on this focus strategy of the business, the firm has been touted to have amazed a lot of profits each year since they adopted this business level strategy. For instance, the company was able to record some success in July 2008, which was one year after since its inauguration. In a similar manner, the automobile Toyota Corporation is another firm that has successfully used the focus strategy to its competitive advantage in the market.
The Toyota Corporation focuses on using specific package software that is managed through customized systems. As observed by Rapp (2000), the Toyota Corporation has shifted to more utilization of customized software packages such that it can link up more with markets and organizational structure. The overall focus strategy by the Toyota Company is to utilize IT in a unique way for competitive advantage, as well as the general success of the company. Comparatively, both Velib and Toyota firms have identified a particular niche upon which they utilize effectively to their competitive advantage in their respective markets.
Both companies seem to employ differentiation strategies as part of their elaborative focus strategies. Reference list Hemne, S, Orsato, RJ, & Wassenhoven, LV, 2010, Velib’: Sustainable Market Space? Viewed 9th April 2015, http: //academiccommons. columbia. edu/download/fedora_content/download/ac: 111611/C ONTENT/WP_177.pdf MacRae, Tn. d, Strategic Management Tools and Applications, viewed 9th April 2015, https: //mail. google. com/mail/u/0/h/xjkws04xslej/? &th=14c9eb771b673514&v=c. Rapp, WV2000, Automobiles: Toyota Motor Corporation Gaining and Sustaining Long-Term Advantage through Information Technology, viewed 9th April 2015 http: //academiccommons. columbia. edu/download/fedora_content/download/ac: 111611/C ONTENT/WP_177.pdf. Tanwar, R 2013,” Porter’s Generic Competitive Strategies, ” IOSR Journal of Business and Management (IOSR-JBM). Vol. 15. No. 1.pp11-17,viewed 9th April 2015, http: //iosrjournals. org/iosr-jbm/papers/Vol15-issue1/B01511117.pdf? id=7380. Figure 1: competitive strategy of a business Figure 2: Business competitive advantage matrix Figure 3: Porter’s generic strategies