Performance Management Systems and Strategies

SPM AND GENERIC STRATEGIES

Michel Porter's (1980) generic strategies are the most commonly identified syndromes in organizations. Organizations worldwide make use of these generic strategies even in managing their performance. Porter (1980) proposed three generic strategies that can yield competitive advantage, namely cost leadership, product differentiation, and focus. To ensure long-term profitability, organizations need to embrace one of the generic strategies, rather than simultaneously following all. For example, cost leadership strategies require the organizations to lower costs and cost advantages through process innovations, learning curve benefits, economies of scale, product designs, optimizing the cycle time for production, reengineering, ...