PORTERS GENERIC STRATEGIES

If the primary determinant of a firm's profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. Even though an industry may have below-average profitability, a firm that is optimally positioned can generate superior returns. A firm positions itself by leveraging its strengths. Michael Porter has argued that a firm's strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus. These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent. The following table illustrates Porter's generic strategies:

Broad

COST LEADERSHIP

DIFFERENTIATION

Narrow

COST FOCUS

DIFFERENTIATION FOCUS

Lower Cost

Differentiation

Cost Leadership & Differentiation

COST LEADRERSHIP STRATEGY

This generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share. In the event of a price war, the firm can maintain some profitability while the competition suffers losses. Even without a price war, as the industry matures and prices decline, the firms that can produce more cheaply will remain profitable for a longer period of time. The cost leadership strategy usually targets a broad market. Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether. If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage based on cost leadership. Firms that succeed in cost leadership often have the following internal strengths:

Access to the capital required to make a significant investment in production assets; this investment represents a barrier to entry that many firms may not overcome. Skill in designing products for efficient manufacturing, for example, having a small component count to shorten the assembly process. High level of expertise in manufacturing process engineering. Efficient distribution channels.

Each generic strategy has its risks, including the low-cost strategy. For example, other firms may be able to lower their costs as well. As technology improves, the competition may be able to leapfrog the production capabilities, thus eliminating the competitive advantage. Additionally, several firms following a focus strategy and targeting various narrow markets may be able to achieve an even lower cost within their segments and as a group gain significant market share.

Cost Leadership & Differentiation

BENEFITS OF LOW-COST STRATEGY As suggested by Porter [a low-cost position] gives a firm a defense against rivalry from competitors, because its lower costs mean that it can still earn returns after its competitors have competed away their profits through rivalry. A low-cost position defends the firm against powerful buyers because buyers can exert power only to drive down prices to the level of the next most efficient competitor. Low cost provides a defense against powerful suppliers by providing more flexibility to cope with input cost increases. The factors that lead to a low-cost position usually also provide substantial entry barriers in terms of scale economies or cost advantages. Finally, a low-cost position usually places the firm in a favorable position vis--vis substitutes relative to its competitors in the industry. Because scale economies and cost advantages tend to defend a firm against powerful buyers and suppliers and provide substantial entry barriers, achieving a low overall cost position often requires a high relative market share. In other words, cost advantages can create value for a firm by reducing the five threats of entry, rivalry, substitutes, suppliers and buyers.

Cost Leadership & Differentiation

DIFFERENTIATION STRATEGY
A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product. Because of the product's unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily. In contrast to the cost leadership strategy, implementation of a differentiation strategy means that value is provided to customers through the unique features and characteristics of a company's products rather than by the lowest price. Because differentiated products satisfy customers' unique needs or preferences, companies can charge premium prices for differentiated products. Firms that succeed in a differentiation strategy often have the following internal strengths:

Access to leading scientific research. Highly skilled and creative product development team. Strong sales team with the ability to successfully communicate the perceived strengths of the product. Corporate reputation for quality and innovation.

The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. Additionally, various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments.
Products can be differentiated in a number of ways so that they stand apart from standardised products:

Superior quality Unusual or unique features More responsive customer service Rapid product innovation Advanced technological features Engineering design Additional features An image of prestige or status

For example Intel uses speed, innovation, and manufacturing techniques as bases of uniqueness.

Cost Leadership & Differentiation

BENEFITS OF DIFFERENTIATION According to Porter differentiation may generate superior profitability for the reason that it provides insulation against competitive rivalry because of brand loyalty by customers and resulting lower sensitivity to price. It also increases margins, which avoids the need for a lowcost position. The resulting customer loyalty and the need for a competitor to overcome uniqueness provide entry barriers. Differentiation yields higher margins with which todeal with supplier power, and it clearly mitigates buyer power, since buyers lack comparable alternatives and are thereby fewer prices sensitive. Finally, the firm that has differentiated it to achieve customer loyalty should be better positioned vis--vis substitutes than its competitors. Besides reducing the five threats of entry, rivalry, substitutes, suppliers and buyers,differentiation creates value by enabling a firm to charge a premium price that is greater than the extra cost incurred by differentiation.

Cost Leadership & Differentiation

FOCUS STRATEGY
The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less bargaining power with their suppliers. However, firms pursuing a differentiation-focused strategy may be able to pass higher costs on to customers since close substitute products do not exist. Firms that succeed in a focus strategy are able to tailor a broad range of product development strengths to a relatively narrow market segment that they know very well. Some risks of focus strategies include imitation and changes in the target segments. Furthermore, it may be fairly easy for a broad-market cost leader to adapt its product in order to compete directly. Finally, other focusers may be able to carve out sub-segments that they can serve even better. A Combination of Generic Strategies - Stuck in the Middle? These generic strategies are not necessarily compatible with one another. If a firm attempts to achieve an advantage on all fronts, in this attempt it may achieve no advantage at all. For example, if a firm differentiates itself by supplying very high quality products, it risks undermining that quality if it seeks to become a cost leader. Even if the quality did not suffer, the firm would risk projecting a confusing image. For this reason, Michael Porter argued that to be successful over the long-term, a firm must select only one of these three generic strategies. Otherwise, with more than one single generic strategy the firm will be "stuck in the middle" and will not achieve a competitive advantage. Porter argued that firms that are able to succeed at multiple strategies often do so by creating separate business units for each strategy. By separating the strategies into different units having different policies and even different cultures, a corporation is less likely to become "stuck in the middle."

Cost Leadership & Differentiation

However, there exists a viewpoint that a single generic strategy is not always best because within the same product customers often seek multi-dimensional satisfactions such as a combination of quality, style, convenience, and price. There have been cases in which high quality producers faithfully followed a single strategy and then suffered greatly when another firm entered the market with a lower-quality product that better met the overall needs of the customers. Our main focus is that which type of strategy is adopted by which brand and how it is helpful in attaining their goals, or BRAND POSITIONING. Generic strategies are described in detail by the means of certain following brands. 1. 2. 3. 4. 5. DELL HTC GM (General Motors) Levis P&G (Procter & Gamble)

Cost Leadership & Differentiation

DELL
Dell, Inc. is an American multinational computer technology corporation based in 1 Dell Way, Round Rock, Texas, and United States, which develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest technological corporations in the world, employing more than 103,300 people worldwide. Dell is listed at number 41 in the Fortune 500 list.It is the third largest PC maker in the world after HP and Lenovo. Dell has grown by both increasing its customer base and through acquisitions since its inception; notable mergers and acquisitions including Alienware (2006) and Perot Systems (2009). As of 2009, the company sold personal computers, servers, data storage devices, network switches, software, and computer peripherals. Dell also sells HDTVs, cameras, printers, MP3 players and other electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce. Dell most certainly has a cost leadership strategy. The company does generate big innovations or gets into technology markets in the introduction stage of the product life cycle.

DELL COST LEADERSHIP STRATEGY

Dell uses efficient cost structures to protect their markets from the competitors by responding to competitors move of making in-roads in the market space by reducing prices. Such reactive response may makes Dell inward focused. Better way to strategically position Dell on advantage of cost is to increase market share by transforming from lowest cost producer to lowest cost supplier of products. This way the company translates its cost advantage into price advantage for its customers and thereby improves the market share. The prospect of increasing the market share provide great opportunity for Dell to leverage the economies of scale coupled with the ruthless cost cutting measures it plans to execute. More the competitive space it occupies which also means that more competitors eliminated effective are economies of scale and as a result the costs are driven still lower.

Cost Leadership & Differentiation

In fact Dell pursuing cost leadership strategy target mass markets with proven products. Dell has sufficient control over in-bound supplies and logistics. Their cost effectiveness starts from the premises of their suppliers. This is important as major costs are incurred in the inbound supply chain. Dell pursuing cost-leadership strategy attempts to gain a competitive advantage primarily by reducing its economic costs below its competitors.

References Competitive Advantage, Michael E. Porter, 1985 Cost Leadership Strategy and Experience Curves, Raphael Amit Strategic Management Journal, Vol. 7, No. 3 (May - Jun., 1986), pp. 281-292 John Wiley & Sons. The cost is reduced by Passing distributor and retail dealer that reduce marketing and sale cost by eliminating the markup of reseller. Building to order greatly reduced the cost and risk associated with carrying large volume of both and finished goods. Cutting out the intermediaries between manufacture and consumer.

SWOT Analysis of DELL

STRENGTHS

Worlds largest PC maker. One of the best known brands in the world. First PC maker to offer next-day, on-site product service. Direct to customer business model. Uses latest technology. Dell has remarkably low operating cost relative to revenue because it cuts out the retailer and supplies directly to the customers.

Cost Leadership & Differentiation

WEAKNESS

A huge range of products and components from many suppliers from various countries. Computer maker and not the computer manufacturer, making DELL unable to switch supply. Dell lacked solid dealer / retailer relationships. No propriety technology
For one, customers cannot go to retailers because Dell does not use distribution channels.

OPPURTUNITIES

Diversification strategy by introducing many new products to its range. The internet also provides Dell with greater opportunities since all they have to do now is to visit Dells website to place their order or to get information. Since Dell does not have retail stores, the online stores would surely make up for its absence. It is also more convenient for customers to shop online than to actually drive and do purchase at a physical store.

THREATS

Competitive rivalry that exists in the PC market globally. New entrants to the market pose potential threats. The threat to become outmoded is a pulsating reality in a computer business. Price difference among brands is getting smaller.

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HTC
INTRODUCTION

HTC Corporation, formerly High Tech Computer Corporation is a Taiwanese manufacturer of Smartphone and tablets. Its core business is the development, production and manufacturing of electronic devices that combines the attributes of a mobile telephone device and handheld computer. Chairman and co-founder of HTC since 1997 is Cher Wang. HTC then developed the worlds first handheld personal data assistant (PDA) using Windows CE. The company initially made Smartphone based mostly on Microsofts and Windows mobile operating system (OS) software, but in 2009 it began to shift its core focus away from Windows Mobile devices to devices based on Android OS, and in 2010 to Windows Phone OS as well. HTC is also a member of the open handset alliance, a group of handset manufacturers and mobile network operators dedicated to the advancement of the Android mobile device platform. The HTC Dream, marketed by T-Mobile in many countries as the T-Mobile G1 or Era G1 in Poland, was the first phone on the market to use the Android mobile device platform.

STRATEGIES FOR POSITIONING

Porter (1980) prescribed organizational requirements for the pure strategies of overall cost leadership or differentiation. Porter recognized that differentiation and cost leadership advantages are not mutually exclusive. The task associated with cost strategy variables focus on internal operation of the business whereas differentiation strategy incorporates variables dealing principally with businesss environment. HTC is working on purely differentiation strategy targeting Niche marketing. HTC brought the mobile device industry to a new level by combining environment, video and personal assistant functions and embedded it into a device with high resolution, brilliant colors and multiple connectivity features. These features attract only specific class of people who know actually what they are taking. They hit those people who really know what he is taking.

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Hambricks (1983) suggests cost strategies are more effective in benign environments with stable prices whereas differentiation strategies are more successful in turbulent environment. HTC faces many competitors in the market but becomes successful above all of them due to its highly differentiated strategies. HTC is typically product focused company and got largest market share in terms of market share. Today, HTC is an important player in telecommunications, having major impact on the entire industry. Earning the device manufacturer of the year award in 2010 by T3 magazine and Tech brand of the year award in 2011 by Mobile world congress. HTC differentiation strategies are based on product designing, developing instinctive user interfaces and software implications and developing its own operating system. HTC fulfills all requirements of the customers with increasing innovations in technology. The pursuit of innovation is reflected in the regularly updated product lineup. HTC gives whatever customers want. HTC is following the policy Be the first one, get the maximum out of it (Mr. Naeem Tabish, Country head of Brightexs Pakistan). As differentiation is related to uniqueness perceived by the customer. Customers will pay a premium price for a meaningful, perceived difference in the product/service (Levitt, 1980) According to Chen (2001), a company can differentiate by enhancing product attributes in a way that adds value for the customer. It can achieve this differentiation through technology, brand usage, additional features or special services. Through the best product option, companies create bonds with customers through the intrinsic superiority of their product/service (Chen, 2001). Any successful differential strategy must be based on element that is difficult for competitors to initiate (Kim, 2000; Porter, 2001). HTC major strength is Research & development due to which it keeps on innovating new technologies with respect to its competitors. It is considered as most reliable brand by creating good image in consumers mind. HTC raised its recognition by releasing the new user interface HTC sense in 2009, which distinguishes itself through a much more intuitive user experience, and by introducing its new advertising campaigns quietly brilliant and YOU. "The YOU campaign is the perfect embodiment of 'quietly brilliant' and is core to HTC as a company, innovator and partner." The YOU campaign is focused on driving broad, global visibility and understanding of HTC's unique brand promise that it's all about YOU, the consumer, and in fact not the device. The YOU campaign features the tagline You dont need to get a phone. You need a phone that gets you. This represents HTCs commitment to focus on people, their needs and how they work and live to ensure that HTC devices suit them.

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HTC is currently using Android operating system, recently launched 15 Android Smartphone in 2011. Analysis conducted by HTC shows that Android technology is getting more popularity among customers and gets market share up to 53% till 2014.

Cost Leadership & Differentiation

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GM (General Motors)
When defining a firms strategic intent we should focus on how the firm defines wining and the way it sustains this objective over time. In the case of GM the company has been going through a lot of changes in the past years, and the critical situation requires the redefinition (re: invention) of its winning strategy. The firm has to provide new operational objectives in order to change its current situation and provide some guidance and consistency over a period of time. Here we offer a critique of Porters cost leadership and differentiation strategies, and a synthesis of the relevant literature. Porter suggests a low-cost position often requires high market share. But how does a business get there first? Answer: market share leaders do it via a strategy of differentiation. Porter lists GM as a successful practitioner of cost leadership strategy. However, the 1976-1982 quality-data shows that higher quality (differentiation) also played a key role in this success. Mint burg argues that Porters low-cost strategy is actually a differentiation strategy based on low price. Porter Identifies High Market Share with Cost Leadership Strategy: Porter has employed the U-shaped curve in describing the link between profitability and market share. According to this curve, the most profitable firms are the low-market share differentiated (e.g., Mercedes) or focused firms at one end, and the largest high-market share practitioners of cost leadership strategy at the other (e.g., General Motors). Porter (1980: 41-42) says this curve is applicable to two important industries: the global automobile industry, and the U.S. fractional horsepower electric motor industry. For lack of space we will focus here only on the auto industry. Porter cites General MotorsGM--(low cost) and Mercedes (differentiation) as the profit leaders in this industry. But, GMs success raises two important questions. First, it is not quite clear, how GM achieved low cost? Was it because of a persistent pursuit of cost leadership strategy, as suggested by Porter, or was low cost mainly the result of the high market share GM enjoyed, or both? It was GMs CEO Alfred Sloan who came out with the pioneering strategy of a car for every purse and purpose. He rationalized GMs cars into five price-quality segmentsfrom a Chevrolet, to a Pontiac, to an Oldsmobile, to a Buick, to a Cadillac. In order to differentiate GM brands from their competition, he positioned each car line at the top of the price scale in its pricequality segment (Data, 1996; Sloan, 1972: 63, chap. 4).

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For more than half a century GM dominated the U.S. auto industry like a colossus with a market share as high as 50% which made it a low-cost leader. It was GMs differentiation strategy that spelled the doom of Henry Fords Model T--and his cost leadership strategy--an event Porter (1980: 45) himself has acknowledged. So, it is ironic that even the most prestigious handiwork--Cadillacof the man wrote the book on market segmentation and differentiation failed the threshold of a differentiated product in Porters scheme of things. We would like to point out here that while multiple brands might have been a good strategy for GM in the past it is not so in todays global competition in which the successful firms like Toyota and others concentrate only on a limited number of car lines (Womack, 2006). DIFFERENTIATION STRATEGY FOR GM

Differentiation strategies are not about pursuing uniqueness for the sake of being different. Differentiation is about understanding customers and how GMs product can meet their needs. To this extent, the quest for differentiation advantage takes us to the heart of business strategy. The fundamental issues of business strategy: Who are GMs customers? How does GM create value of them? And how does GM do it more efficiently than anyone else? Because differentiation is about uniqueness, establishing differentiation advantage requires creativity- it cannot be achieved simply through applying standardized frameworks and techniques. This is not to say that differentiation advantage is not amenable to systematic analysis. As have observed, there are two requirements for creating profitable differentiation. On the supply-side, GM must be aware of the resources and capabilities through which it can create uniqueness (and do it better than competitors). On the demand side, the key is insight into customers and their needs and preferences. These two sides form the major components of our analysis of differentiation. In analyzing differentiation opportunities, GM can distinguish tangible and intangible dimensions of differentiation. Tangible differentiation is concerned with the observable characteristics of a product or service that are relevant to customers preferences and choice processes. These include size, shape, color, weight, design, material, and technology. Tangible differentiation also includes the performance of the product or service in terms of reliability, consistency, taste, speed, durability, and safety.

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General Motors Leadership Doesn't Get It," Says Leadership Expert "The automaker is paying the price for neglecting a key strategic driver: a leadership strategy." Williamstown, MA December 1, 2005 -- Leadership expert, Brent Filson, says that the recent job cuts and reorganization of General Motors is not so much the result of marketplace dynamics but of the company's relentless leadership failings. "The GM leaders who are driving the cuts are missing the point," says Filson, founder and president of The Filson Leadership Group, Inc., a corporate consultancy. "Sure, they have a cost cutting strategy. All manufacturers must be continuously reducing costs -- at least three to five percent a year. But what the GM leaders are neglecting is a strategy that works in tandem with cost cutting: That's a Leadership Strategy." Filson says that General Motors like so many organizations lacking Leadership Strategies know how to develop and implement cost cutting strategies. "Cost cutting is not complicated. But you can't cost-cut your way to success. And that's where the Leadership Strategy comes in. A Leadership Strategy can help the company get great results, both in the bottom and top lines. Companies that don't have a Leadership Strategy, if not in name at least in effect, are missing out on colossal streams of revenue."

PEST Analysis of GM
POLITICAL The economic downturn has caused governments to increase regulations and tighter policies. Most of these regulations are the result of increasing concerns for the environment and safety standards. Also the US Government recently bailed out General Motors by purchasing a 60% stake. Although the Government will not take any part in the management, GM would still have to report back to its largest shareholder. ECONOMICAL Due to the recent economic recession the value of money has decreased, consequently reducing the spending power of consumers. Therefore a decrease in demand for high value products such as vehicles can be seen. Also due to the credit crisis the American financial system was frozen (CNN), resulting in banks freezing all money lending facilities regardless of the credit ratings. Therefore potential customers will find it hard to get loans to purchase vehicles.
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SOCIO-CULTURAL The modern society judges people by the vehicle they drive. Driving an expensive new car is an indication of wealth and social status. Therefore manufacturers tend to make use of this social perception and take advantage by catering and marketing to different social classes or different income level groups. Also, since recently more consumers are concerned about the environment and the concept going green. This has paved way to a new emerging market, where manufacturers concentrate on producing environmental friendly vehicles such as hybrid vehicles. TECHNOLOGICAL The introduction of internet has affected the industry in a positive way. More consumers prefer looking for vehicles over the internet before purchasing. Also the internet proves to be a very effective marketing scheme. A sharp increase in demand for hybrid vehicles can be seen. These technologically advanced vehicles which run on electricity of other forms of eco-friendly gases are preferred by more consumers.

SWOT Analysis
In order to assess the strengths, weaknesses, threats and opportunities GM faces a SWOT analysis has been conducted.A SWOT analysis summarizes the key issues from the business environment and the strategic capability.

STRENGTH Although GM has lost most of its market share recently, it remains to be one of their main strengths. They are still very competitive with about 20% market share in the USA. Also GM has a growing market in China, making it the second biggest automaker in China (NY times).The On Star satellite technology which comes standard in all GM vehicles is another advantage GM has. This technology enables easy tracking of the vehicle in case it is stolen. In production GM has economies of scale, making it possible to produce at a lower cost than competitors. Their global network of suppliers is another added advantage over their competitors.

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WEAKNESSES The bureaucratic organizational structure is GMs main weakness. The structure is vertically integrated causing lack of communication and slow feedback between the top management and employees.GM has always been a step behind competitors when it comes to alternative fuel vehicles. With the trend now moving towards hybrid and eco-friendly vehicles, GM is yet to come up with a competitive vehicle. Furthermore in a time of high oil prices most consumers prefer Japanese and Korean fuel efficient vehicles to GMs gas guzzling trucks and SUVs. Also the constant labor union problems and high healthcare expenditure proves to be another weakness of GM (healthcare). OPPURTUNITIES As mentioned earlier, there is an increased demand for low cost, fuel efficient vehicles which are eco-friendly. This creates an opportunity for GM to enter a new and growing segment of the market. GM has already made plans to unveil its first hybrid vehicle, Chevy Volt, and have unveiled the US version of the fuel efficient sedan, the 2011 Chevrolet Cruse (GM website).Recently GM was able to increase their market share in China, enabling them to become the second biggest automaker (NY times). This shows the potential for investing in growing markets. At present, many potential consumers are more interested in the attractiveness and features on the vehicle. This taste in vehicles tends to change very frequently. By knowing what consumers want and producing accordingly, GM has a chance of regaining most of its lost glory. THREATS A major threat facing GM is the rising fuel prices. Since most of GMs vehicles are not fuel efficient, they tend to lose demand at times like these. The increasing healthcare expenditure can also be categorized as a threat. GM is responsible for providing healthcare insurance for more people than any other company in the USA .Therefore this raising expense is a burden to compete with other rivals (Washington Post).The past decade saw Toyota claim the title of the largest automaker overtaking GM. This growth of competitors is also a major threat to GM. They also face stiff competition from Ford, and other Japanese and Korean companies.

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LEVIS

Introduction of Levis
Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi Strauss Europe, Middle East and Africa (LSEMA), based in Brussels; and Asia Pacific Division (APD), based in Singapore. The company employs a staff of approximately 10,500 people worldwide. The core Levi's was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion. From the early 1960s through the mid-1970s, Levi Strauss experienced explosive growth in its business as the more casual look of the 1960s and 1970s ushered in the "blue jeans craze" and served as a catalyst for the brand. Levi's, under the leadership of Walter Haas Jr. Peter Haas, Ed Combs, and Mel Bacharach, expanded the firm's clothing line by adding new fashions and models, including stone-washed jeans through the acquisition of Great Western Garment Co.(GWG), a Canadian clothing manufacturer, and introducing Permanent Press trousers under the Starkest name. The company experienced rapid expansion of its manufacturing capacity from fewer than 16 plants to more than 63 plants in the United States from 1964 to 1974 and 25 overseas. Levi's' factory expansion was accomplished without a single unionized employee. The use of "pay for performance" manufacturing at the sewing machine operator level up. As a result, Levi's' plants were perhaps the highest performing, best organized and cleanest textile facilities of their time. Levi's even piped in air conditioning for the comfort of Levi's workers into its press plants, which were known in the industry to be notoriously hot.2004 saw a sharp decline of GWG in the face of global outsourcing, so the company was closed and the Edmonton manufacturing plant shut down. The Dockers brand, launched in 1986 which is sold largely through department store chains, helped the company grow through the mid-1990s, as denim sales began to fade. Dockers were introduced into Europe in 1993. Levi Strauss attempted to sell the Dockers division in 2004 to relieve part of the company's $2 billion outstanding debt. Launched in 2003, Levi Strauss Signature features Jeanswear and casual wear. In November 2007, Levi's released a mobile phone in co-operation with Mode Labs. Many of the cosmetic attributes are customizable at the point of purchase. During the launch of Levi's Curve ID jeans.

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Brands of Levis
Brand is a name, term, sign, symbol or design that adds value to the products. LS & CO. earns remarkable revenues throughout the year coz its products are considered to be the worlds largest quality products LS & CO. is basically divided into 3 sub brands i.e. Levis, Dockers and Levis Strauss Signature. All the three brands are providing different quality products. LEVIS The Levis brand epitomizes classic American style and effortless cool and is positioned as the original and definitive jeans brand. Since their inception in 1873, Levis jeans have become one of the most recognizable garments in the world reflecting the aspirations and earning the loyalty of people for generations. Consumers around the world instantly recognize the distinctive traits of Levis jeans the double arc of stitching, known as the Arcuate Stitching Design, and the red Tab Device, a fabric tab stitched into the back right pocket. Today, the Levis brand continues to evolve, driven by its distinctive pioneering and innovative spirit. Our range of leading Jeanswear and accessories for men, women and children is available in more than 110 countries, allowing individuals around the world to express their personal style. The current Levis product range includes Levis Red Tab Products These products are the foundation of the brand. They encompass a wide range of jeans and Jeanswear offered in a variety of fits, fabrics, finishes, styles and price points intended to appeal to a broad spectrum of consumers. The line is anchored by the flagship 501 jean, the original and bestselling five-pocket jean in history The Red Tab line also incorporates a full range of Jeanswear fits and styles designed specifically for women. Sales of Red Tab products represented the majority of our Levis brand net sales in all three of our regions in fiscal years 2009, 2008 and 2007.

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Premium Products In addition to Levis Red Tab premium products available around the world, Levis offer an expanded range of high-end products. In 2009, we consolidated the management of our most premium Levis Jeanswear product lines under a new division based in Amsterdam. This division will oversee the marketing and development of two global product lines: our existing Levis Vintage Clothing line, which showcases our most premium products by offering detailed replicas of our historical products, and Levis Made & Crafted, a recently-launched line of premium apparel. Levis brand products accounted for approximately 79%, 76% and 73% of our total net sales in fiscal 2009, 2008 and 2007, respectively, approximately half of which were generated in our Americas region.

DOCKERS First introduced in 1986 as an alternative between jeans and dress pants, the Dockers brand is positioned as the khaki authority and aspires to be the worlds best and most-loved khakis. The Dockers brand offers a full range of products rooted in the brands khaki heritage and appropriate for a wide-range of wearing occasions. We seek to renew the appeal of the casual pant category by dealing up khakis masculinity and swagger and reminding men what they love about the essential khaki pant. This positioning is reflected in the Wear the Pants campaign launched globally in December 2009. The brand also offers a complete range of khaki-inspired styles for women with products designed to flatter her figure and provide versatility for a wide range of wearing occasions. Our Dockers brand products accounted for approximately 16%, 18% and 21% of our total net sales in fiscal 2009, 2008 and 2007, respectively. Although the substantial majority of these net sales were in the Americas region, Dockers brand products are sold in more than 50 countries. Levis Strauss Signature Levis seek to extend the style, authenticity and quality for which our company is recognized to more value conscious consumers through our Signature by Levi Strauss & Co.TM brand. Levis offer products under this brand name through the mass retail channel in the United States and Canada and value-oriented retailers and franchised stores in Asia Pacific. Levis use these distribution channels to reach consumers who seek access to highquality, affordable and fashionable Jeanswear from a company they trust.

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The product portfolio includes denim jeans, casual pants, tops and jackets in a variety of fits, fabrics and finishes for men, women and kids. Signature by Levi Strauss & Co. TM brand products accounted for approximately 5%, 6% and 6% of our total net sales in fiscal years2009, 2008 and 2007, respectively. Although a substantial majority of these sales were in the United States, Signature by Levi Strauss & Co.TM brand products are sold in seven additional countries in our Americas and Asia Pacific regions.

How Levis Differentiates It Self?

With all of the competition in the apparel industry, Levis differentiates itself from all other competitors through the ability to brand products through strong brand image. According to Levis website, the company markets its products under leading brand names that are among the most successful apparel brands in the world and it is one of the most widely recognized brands in the history of the apparel industry. Additionally, Levis currently has numerous retail locations including 67 company operated stores in 10 countries. The company distributes its products in a wide variety of retail formats around world including franchise stores, company owned stores, specialty stores, chain and mass channel retailer Brand and product proliferation continues around the world as they and other companies compete through differentiated brands and products targeted for specific consumers, pricepoints and retail segments. In addition, the ways of marketing these brands are changing to new mediums, challenging the effectiveness of more mass-market approaches such as television advertising.

Is Levis Using Cost Leadership Strategy?

Levis is a worldwide brand and everyone is well aware of this brand just because of its differentiated product. Levis is somehow following cost leadership strategy in this sense they cut the labor cost by outsourcing its stitching section to those countries where labor is cheap. But as far as concern to the quality of their material they can cut cost of it by coming to lower quality but they dont do this in order to attain their Strong Brand Image differentiates themselves from their competitors.

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P&G (Procter & Gamble)

In 1837, Procter & Gamble was started as a soap and candle company out of Cincinnati, OH. Procter & Gamble has since grown to become the largest consumer goods product company in the world, with $68 billion in sales worldwide for fiscal year 2006. Corporate headquarters are still in Cincinnati, and they maintain 39 manufacturing facilities in 23 states, as well as 105 manufacturing facilities in 41 other countries. Procter & Gamble manufacturing facilities produce personal health care products, house and home care products, health and wellness products, baby and family care products, and pet care and nutrition products. These products have made Procter & Gamble a recognized global leader in the development, manufacture and marketing of some of the worlds most trusted, quality, leadership brands including Pampers, Tide, Ariel, Always, Whisper, Pantene, Mach3, Bounty, Dawn, Pringles, Folgers, Charmin, Downy,Lenor, Aims, Crest, Oral-B, Atonal, Duracell, Olay, Head & Shoulders, Walla, Gillette, and Braun . Procter & Gamble boasts over 300 brands being sold in as many as 160 countries. P&Gs strategy is flexibility for quick response to market demands and opportunities, development of strong product branding, and new product innovation. To achieve speed and flexibility, P&G has been leader in e-business implementation, obtaining real-time information and utilizing global knowledge sharing externally from its users, suppliers and buyers, and internally for management and product development. P&G also maximizes its value by investing in global markets through acquisition, joint ventures, alliances, direct investment and direct marketing. P&G understands the importance of local market insights and successful management of people in foreign markets and subsidiaries and has achieved competence in these key aspects of globalization. From a portfolio perspective, P&Gs investments and business developments have remained in or related to the consumer products industry, maintaining its focus. P&G Chemicals and Health Sciences lab reflect the vertical integration of its current product line.

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STRATEGY: P&G, with the largest product portfolio in the consumer products industry, faces significant challenges maintaining cost efficiency and scale economies while creating innovation and differentiation. With their recent acquisition of Gillette, P&G now has 22 brands that each exceeds $1B in annual sales. The company is divided into four pillars: Global Business Units, Market Development Organizations, Global Business Services and Corporate Functions, each working separately and together to bring competitive advantage to P&G. As competition from other major global and small local companies are vying for market share, a sound business strategy, with a focus on flexibility and responsiveness, is required to maintain and grow their leadership position. P&G's business strategy focuses on large-scale operations, strong product branding, and product innovation to develop competitive advantage. P&G is the global leader in its four core categories, Baby Care, Feminine Care (35%), Fabric Care (approximately 30%), and Hair Care (greater than 20%). To achieve sustainability and continued growth, P&G's strategy is to continue to innovate and sell products that appeal to retail trade customers and consumers, providing pricing and product that adds value for the customer, while improving efficiencies in sales and operations with their ongoing restructuring and technology enhancements, and quickly responding to competitive advancements. P&G has been awarded #1 best category management and consumer marketing, another competitive advantage, and continues to concentrate on relationship management with customers and suppliers. With ongoing improvements in resource management, planned divesture and ongoing acquisition strategies, and continued maximization of their product innovations, marketing, and rapid go-to-market strategies, P&G should continue to meet (and exceed) its business goals.

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UNILEVER
Unilever was officially formed in 1930, through the merger of Lever Brothers, a British soap manufacturer and Margarine Unite, a Dutch margarine manufacturer. It has since become one of the largest direct investors in the United States. Unilever is unique in that it has maintained a dual ownership structure since its inception, governed by an equalization agreement. Although the company has two legal entities as its parents, one Dutch (Unilever NV), and one British (Unilever plc), it has only one board of directors and reports one set of financial statements. Today Unilever is present in 150 countries, employs over 223,000 people, and has numerous well-known brands, 12 of which each have worldwide sales exceeding 1 billion. Unilever has products for three markets, home, food, and personal care, 50 which fall into 6 primary categories: home care (17%), spreads (12%), savory & dressings (21%), beverages (8%), ice cream & frozen foods (16%), and personal care (26%). Unilever trails slightly behind P&G in most product segments; its similar focus on branding, product development and quality advertising has helped it hold its position. Unilevers biggest challenges are in improving efficiencies to reduce costs, especially in its use of people and its time to market. Unilevers costs and number of employees is much higher than P&Gs. As P&G takes a proactive role in-business and innovation, Unilevers stance is a reactive one. Although Unilever seems to have expanded globally with some success, it seems to be lacking an overall global strategy. Learning and sharing information on a global scale is one of P&Gs strengths, but a weakness for Unilever. Unilever has improved its focus and resource allocations, as it divested itself of non-performers, allowing it to concentrate on performing products. Unilever needs to establish a focused strategy, and ensure activities drive toward strategy achievement. The recent corporate restructuring should continue, with ongoing efforts to achieve a corporate structure, which will maximize strategy achievement. The improvements in overall communications, processes, and market introductions and management will enable Unilever to remain competitive and grow as an industry leader. Additionally, recommendations provided herein include an alignment of strategies, a strengthening of brand differentiation, and continued investments in R&D, global expansion, advertising, and strategic alliances.

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STRATEGY Most companies that hold a market leadership position do so by achieving the right balance between differentiation and low cost. In the consumer products industry, consumers have many choices regarding which brand they select. Unilever's market leadership cannot be sustained if costs are significantly higher than a competitor's products. Similarly, without adequate differentiation, brand loyalty could be difficult to maintain. For Unilever, the current business-level strategy would be characterized as a differentiation strategy, where the emphasis is on branding, advertising quality and new product development. Unilever holds the world number one position in five of six food segments, and two of six segments in Home & Personal Care (skin and deodorants). Unilever holds the (world) number two position in two of the six Home and Personal Care segments (Laundry and Daily Hair Care) and is number three or less in Household Care and Oral Care. Company resources have been divided into two primary functions, one responsible for brand development, innovation, and brand strategy ("Categories"), and the other for managing the business, effective deployment of brands and innovations, and winning with customers ("Regions"). Their commitment to R&D and innovation is clearly stated through their mission statement ("Add vitality to life") and their corporate purpose ("Vitality Innovation"). The alignment of company resources with its strategy is an important component for sustaining a competitive advantage.

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CONCLUSION

DELL
Dell has been very successful because of its cost leadership it has been able to reduce the cost with the help of its Direct Business Model. Dell sells directly to its customer hence eliminating the intermediaries. Dell cut cost from the beginning and then this low cost and best quality product launch into the market which gains high market share, due to this Dell gain competitive advantage over their competitors.

In sum, Dell has been so successful Because of a strong initial lead in cost leadership, but also in quality (eg driving down the number of human touches to the computer to drive down defects) and ordering/upgrading convenience. Because it does not rest on its laurels but continues to 'run faster than competitors' on both dimensions. New mergers and acquisitions also give several benefits to Dell.

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HTC
HTC is working on purely differentiation strategy targeting niche marketing. They hit only those people who really know what they are taking. HTC faces many competitors in the market but becomes successful above all of them due to its highly differentiated strategies. HTC is typically product focused company and got largest market share in terms of market share. HTC differentiation strategies are based on product designing, developing instinctive user interfaces and software implications and developing its own operating system.

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GM (General Motors)

General Motors (GM) are operating on differentiation as well as Cost leadership. According to Porter it is working on Cost leadership. Filson said that GM is losing the leadership strategy. At last the conclusion is that, GM achieved High market but through Differentiation, here answer to the question given that how high market shares is attained in first place. Further, it is found that GM is auctioneer of Differentiation strategy as it describes the price ranges of variety of cars according to the people purpose and need. In above perspective it is seen that in further slicing the differentiation for particular cars low cost strategy is also used. Hence, it is concluded that GM is working on Hybrid Strategy.

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LEVIS

Levis is having Strong brand image just because of its differentiation while during the determination of the price company not considered the competitors, but the standard that is used is considered. Companys price is influenced by the following factors: Cost of the product Affordable for the target market Demand of the product Uniqueness and innovative features of the products

The above mentioned factors are those factors which make Levis as a differentiated brand.

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P&G and UNILEVER

P&G is a leader in the industry. Unilever can learn from P&G and further develop itself as a leader. Taking into consideration the analysis provided, Global Strategy Advisors believe that there is considerable opportunity for Unilever to strengthen its profitability and sustainability; however it will require strong discipline and careful analysis in terms of pursing appropriate acquisitions and divestitures, cost reduction programs, product and brand differentiation initiatives, and alignment of strategies. We recommend the following plan of action, Align Unilever resources to strategies; align strategies to optimize all value chain components. Regional Unilever strategies are individually strong; develop an overarching global strategy that provides consistent direction and ensures global synchronization and pooling of knowledge and best practices. E-Business strategy progressing; continue to invest in IT and internet solutions to achieve global efficiencies in negotiations, electronic transactions, and communications related to suppliers, distribution networks, and retailers/customers. Look for opportunities for vertical integration: cost savings and increased efficiencies can be created with this modification in the Unilever portfolio. Strengthen consumer research and brand differentiation. Continue consumer research efforts to ensure an understanding of the global marketplace. Continue consumer research to ensure that products and brands are meeting target customer needs, while identifying new opportunities. Utilize partnerships and alliances for market understanding and product development. Continue investments in R&D initiatives for increasing line extensions and new products; develop fallback plans should line extension efforts fail, and pursue increased efficiencies and cost reduction strategies. Balance differentiation with low costs and continue reducing costs. Market leadership cannot be sustained if your costs continue to exceed that of your competitors products. Seek opportunities to out-source, where economically feasible and ROI is highly probable. Increase focused advertising, especially for higher profit line and expansion in emerging countries.

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